This project undertakes an ambitious research agenda to develop new theoretical models and exploit rich new data to examine the links between trade agreements and supply chains.
The project is motivated by two major trends that have characterized international trade during the last few decades. The first is the fragmentation of production processes across countries: advances in information and communication technology and falling trade barriers have allowed firms to retain in their domestic economies only a subset of production stages, leading to a surge of trade in intermediate goods and the emergence of global supply chains.
The second trend is the proliferation of regional trade agreements (RTAs), which have risen in number and have become “deeper,” encompassing many provisions that go beyond traditional trade policy. RTAs have contributed to the creation of regional supply chains (e.g., “Factory Europe”, “Factory North America”), shaping firms’ sourcing decisions through preferential tariffs and rules of origin.
The TRASC research agenda addresses novel and timely questions about the RTAs-supply chains nexus, emphasizing the key role played by firms and the importance of understanding the interplay between economics, law, and politics.
The agenda is divided in two parts and has two broad objectives. The first part examines the impact of trade agreements and protectionist policies on supply chains. It builds on the literature on global sourcing, which has so far neglected the role of trade policy. The second part aims to shed light on the political factors that shape trade agreements. It examines how large corporations with international supply chains can shape the content and political support for these agreements. It builds on the literature in political economy of trade, which has mostly neglected the role of firms.
To carry out this ambitious research agenda, a team of doctoral and postdoctoral researchers has been hired at the Université Libre de Bruxelles. Upon joining Oxford Department of Economics, from 1st October 2022 onwards, Professor Conconi will carry out her upcoming research activities in collaboration with both universities.
This grant is funded by the European Research Council (Advanced Research Grant) – Project 834253.
