Working Papers

"Harmonization, Mutual Recognition or National Treatment: a Melitz approach with quality standards", LIDAM Discussion Paper LFIN

Abstract: This paper builds on a Melitz model to compare the welfare effects of three classic legal frameworks used in trade agreements: national treatment, mutual recognition, and harmonization. I specifically deal with two countries setting quality standards in a world where love-for-quality is heterogeneous across country. My results show that harmonization is the best choice in terms of national welfare when exporters are confronted with both lower and higher foreign standards. In addition, with a higher foreign standard, harmonization improves competition in a better way than mutual recognition.

"when and who complains matter: evidence from a new database on TBT STCs" (with F. Santeramo)

Abstract: Specific Trade Concerns (STCs) on Technical Barriers to Trade (TBTs) are expected to be a signal for restrictiveness, increasing trade costs significantly more than TBTs without STCs. Using STCs relies on the assumption that the raised dates at the WTO effectively proxy the trade shock. Our paper examines two potential endogeneity issues when using raised dates. First, a STC can occur a long time before or after the TBT is initiated or in-force. Second, a TBT reducing trade increases the willingness to complain at the WTO and complaints might impact trade in return. To investigate endogeneity, we create a 1:1 match of STCs with respective TBTs using an updated STC database which includes notification and enforcement dates. It enables us to control the timing between a TBT and its respective STC. While there is no significant bias taking all sectors into account, we find a non-negligible bias for the broad agriculture sector and for some specific sectors inside the manufacturing, mining and energy, and services broad sectors. The timing between TBT dates also affect our broad sectors results.

"Do the Specific Trade Concerns oil the chains? An empirical study on the hidden goals and impacts of TBTs on GVCs"

Abstract: Specific Trade Concerns (STCs) on Technical Barriers to Trade (TBTs) are a tool to signal important trade issues at the WTO. The literature argues it can be used to focus on the most stringent TBTs in terms of trade impact. However, many are raised at the WTO one time or for reasons not linked to trade barriers. I build a stringency index on TBTs to investigate the determinants of this stringency characteristic. As a contribution, I propose a revisited definition of stringent TBT which help understand better why previous results in the literature are ambiguous.