Deep Trade Agreements and Vertical FDI : The Devil Is in the Details

October 1, 2015

Recent data show that the institutional content of preferential trade agreements has evolved over time. Although pre-1990s preferential trade agreements mostly focused on tariff liberalization, recent agreements increasingly contain deep provisions in diverse areas, such as intellectual property rights, investment, and standards. At the same time, there has been a remarkable increase in the internationalization of production through foreign direct investment and outsourcing. This paper employs the Antràs and Helpman (2008) model of contractual frictions and global sourcing to study how deep trade agreements affect the international organization of production.

Read Full Material: Link


Topics: FOREIGN DIRECT INVESTMENT (FDI) TARIFF LIBERALIZATION PREFERENTIAL TRADE AGREEMENT (PTA) TRADE-RELATED ASPECTS OF INTELLECTUAL PROPERTY RIGHTS (TRIPS)

Authors: ALBERTO OSNAGO NADIA ROCHA MICHELE RUTA

Publishing Institution: WORLD BANK GROUP

RTA

Other Research

RTA

Multilateralising Telecoms: A Step-Change in Need of a Step?

February 2, 2018

In the rapidly developing digital economy, where user-generated content is on the rise, and end-users are no longer just consuming content, but also developing, uploading, and networking content, t... READ MORE

RTA

The Digital Transformation and the Transformation of International Trade

January 23, 2018

The digital transformation has facilitated old modes of trade and business models and enabled the creation of entirely new ones. Digital disruption is being felt across all modes of trade: digital... READ MORE