Job Market Paper

Who Gains from Trade? Labor Market Impacts of RTAs in a Sectoral-Armington Model 

Abstract: This paper investigates the general equilibrium effects of Regional Trade Agreements (RTAs) on labor market outcomes using a sectoral-Armington framework with endogenous labor allocation across sectors. Using RTA trade effects estimated with a gravity model, I compute the changes in trade costs due to the implementation of RTAs between 1986 and 2018, which are used to solve the equilibrium condition in changes for changes in relative wages and sectoral employment across countries. The results show that small and developing countries benefit in relative wage terms, while advanced economies experience losses. Applying the model to an ex ante trade policy, the Transatlantic Trade and Investment Partnership (TTIP) between the United States (US) and European Union (EU), the analysis finds that TTIP could significantly boost relative wages in the EU, while modestly reducing them in the US and non-member countries. [Link]

Working Papers

Globalization, Borders, and the Limits of RTAs in Africa

Abstract: This paper examines the dynamic trade effects of Regional Trade Agreements (RTAs) in Africa within the broader context of globalization. Using a dynamic gravity model that accounts for international borders and geographic factors, the results show that RTAs led to a 670% increase in intra-African trade over a 45-year period. However, when border-related frictions capturing the effects of globalization are included, the trade impact drops to 260%; supporting the view that the large average trade effects of RTAs in Africa cannot be explained by tariff cuts alone. The analysis also uncovers significant trade diversion effects when non-tariff barriers are considered, challenging the conventional view of RTAs as net welfare-enhancing in Africa. [Link]

The Post-MFA Dynamics of AGOA Apparel Trade 

Abstract: This paper evaluates the effect of the African Growth and Opportunity Act (AGOA) on United States (US) apparel imports from Sub-Saharan Africa (SSA), with particular attention to the period following the 2005 expiration of the Multi-Fiber Arrangement (MFA). Using a Triple-Difference model with a rich set of fixed effects, the analysis finds that AGOA increased US apparel imports from SSA by approximately 90%. However, following the MFA phase-out, global competition in apparel markets intensified, leading to a slowdown in export growth, especially for non-least developed countries in western and southern Africa. In contrast, eastern African countries were less affected, likely due to their comparative advantage in labor-intensive apparel production in the continent. [Link]

Work in Progress

FDI, Trade Liberalization, and Human Capital in General Equilibrium Framework

RTAs, FDI, and Capital Growth under the Transatlantic Trade and Investment Partnership