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This article sheds light on the restrictive nature of rules of origin (ROO) and on the role of diagonal cumulation in mitigating the protectionist content of ROO. Empirical evidence suggests that diagonal cumulation has beneficial effects on trade—particularly among spoke countries. We show that these patterns can be reconciled with a theoretical setting where heterogeneous firms buy intermediate inputs from domestic and foreign sources. The model finds that switching from bilateral to diagonal cumulation relaxes the restrictiveness of the ROO and leads the least productive exporters to stop exporting.

This paper estimates the impact of antidumping protection on export, behavior of French firms covered by antidumping cases. Traditional models suggest that all domestic firms covered by antidumping protection should benefit from protection. However, in an environment of globally fragmented supply chains, firms may be damaged by protection if duties increase input costs for firms covered by the protection. Results from this paper indicate that while non-exporting firms benefit from protection, domestic sales of export-oriented firms and exports in general, are depressed due to protection. This effect is more severe for multinational firms.

We provide a theory of trade policy determination that incorporates the protectionist bias inherent in majoritarian systems, suggested by Grossman and Helpman (2005). The prediction that emerges is that in majoritarian systems, the majority party favours industries located disproportionately in majority districts. We test this prediction using U.S. data on tariffs, Congressional campaign contributions, and industry location in districts represented by the majority party over the period 1989-97. We find evidence of a significant majority bias in trade policy: the benefit to being represented by the majority party appears at least as large in magnitude as the benefit to lobbying. On propose une théorie de la détermination de la politique commerciale qui incorpore le tendence protectionniste inhérent aux systèmes électoraux à scrutin majoritaire selon Grossman et Helpman (2005). La prédiction qui en ressort est que, dans un tel système, le parti de la majorité favorise les industries localisées de façon disproportionnée dans les circonscriptions détenues par la majorité. On évalue cette prédiction à l'aide des données sur les tarifs douaniers aux Etats-Unis, sur les contributions aux campagnes électorales au Congrès, et sur la localisation des industries dans les circonscriptions représentées par lc parti de la majorité pour la période 1989-97. Les résultats révèlent un biais significatif dans la politique commerciale : l'avantage d'être représenté par le parti de la majorité s'avère au moins aussi important que l'avantage du lobbying.

That global trade imbalances matter has been made abundantly clear by the ongoing global economic malaise. The likely path to more sustainable levels of trade deficits, however, remains far less clear. Consider the potential global impact of populist cries for protectionist trade policies ostensibly aimed at easing the difficult transition to more sustainable trade and debt balances. In the event of a trade war, people would all lose. Perhaps even more disquieting, however, is how these consequences would most likely play out across nations. The evidence presented in this commentary suggests that countries like China, which depend heavily on total trade in relation to their overall economy, would suffer most severely. This evidence further suggests that instead of pursuing short-term quick fixes that would exacerbate the malaise, global leaders must work together to establish a long-term path to more sustainable trade and debt balances.

China’s economic strategy is facing new challenges arising from the changes in the world economy as well as in its domestic conditions. Given the sluggish global economy and the rise of protectionist policies, China cannot expect external demand to contribute to its economic growth as much as in the past. On the domestic side, the working age population has ceased to increase and will soon diminish; rising domestic costs will force Chinese exporters to shift from price competitiveness to quality upgrading and to build new comparative advantages. An important dimension of China’s new strategy will be the expansion of its direct investment abroad. China which has already become the leading world exporter and has been up to now a major recipient of foreign direct investment is likely to turn out to be a major international investor. China has accumulated large foreign assets which mainly consist of foreign government debt securities and is now aiming at diversifying its external assets through promoting Chinese firms’ investment abroad.

This volume combines the analyses of leading experts on the various elements affecting economic growth and the policies required to spur that growth. Ascent after Decline: Regrowing Global Economies after the Great Recession identifies the main challenges to the economic recovery, such as rising debt levels, reduced trade prospects, and global imbalances, as well as the obstacles to growth posed by fiscal conundrums and lagging infrastructure. It also examines the way forward, beginning with the role of the state and then covering labor markets, information technology, and innovation. The common thread throughout the book is the view that economic re-growth will depend in large measure on smart policy choices and that the role of government has never been more crucial than at any time since the great depression. As members of the World Bank community, these issues are of particular importance to us, since without a resurrection of strong economic growth in major economies, the likelihood of rapid economic development in poorer developing countries is dampened. This is troubling because we have seen progress in many parts of the globe in the past decade, including in Africa, and these gains will be arrested as long as the global economy is in disarray. Donors will withdraw, investment will retrench, and prospects will dim. This immiserizing welfare outcome is to be avoided. The volume is intended to shed light on those areas of policy that reduce the prospects of a prolonged period of stress and decline by 'regrowing growth.'

Faced with financial crisis and recession, many countries may promote return migration as a measure to combat economic decline. This affects the transnational migration and thus likely to contribute to a decline in remittance flows. At the same time, human agency proves the resilience of the migrants’ coping strategies, since many migrant workers – though faced with heightened pressure and increased precariousness of their positions – nevertheless persevere and thus sustain the flow of remittances. Drawing on biographical narrative interviews with migrants in Slovenia, this article analyses migrants’ position in the time of financial crisis and critically evaluates the governmental measures that restrict the migrants’ access to the labour market. We argue that protectionist policies are short-sighted and, rather than combating the crisis, they force many workers into even more vulnerable positions.