Publications des chercheurs de PSE

This paper examines the labor market implications of the EU posting policy, a large temporary migration program facilitated by the liberalization of the free provision of services in Europe. Posting allows EU firms to send ("post") their employees abroad to export customer-facing services. Combining administrative data and quasi-experimental policy variation, I find that the policy permanently increased total factor mobility in Europe without crowding-out of traditional migration. This result suggests that unrealized gains from trade in factor services remained despite the absence of regulatory barriers to trade and migration in the EU. Furthermore, posted workers are mostly sent from low-wage countries to perform manual tasks in sectors formerly insulated from trade, and they represent a substantial share of EU migrant workers. In receiving countries, posting had persistent negative effects on employment for domestic workers in the more exposed sectors and local labor markets, but it had no effects on domestic wages. In low-wage sending countries, firms in formerly "non-tradable" sectors experienced increased sales, profits and tax payments when exporting services through posting. Posted workers earn more once sent abroad but remain paid at lower wages than comparable domestic workers in the receiving country. Wage gains for posted workers are mostly explained by minimum wages enforced by the EU policy, highlighting the role of labor market regulations in shaping the way gains from globalization are shared between labor and capital-owners in origin countries.

Recent years have seen a surge in economic integration agreements (EIAs) and the development of non-tariff measures (NTMs). As a consequence, a growing number of EIAs include provisions on NTMs. This paper focuses on provisions on technical regulations. We investigate whether the technical requirements contained in North-South Agreements affect international trade. More particularly, using a gravity equation, we assess to what extent North-South harmonization of technical barriers creates or reinforces a hub-and-spoke trade structure potentially detrimental to the integration of Southern countries in world economy.

The debate on trade wars and currency wars has re-emerged since the Great recession of 2009. We study the two forms of non-cooperative policies within a single framework. First, we compare the elasticity of trade flows to import tariffs and to the real exchange rate, based on product level data for 110 countries over the 1989-2013 period. We find that a 1 percent depreciation of the importer's currency reduces imports by around 0.5 percent in current dollar, whereas an increase in import tariffs by 1 percentage point reduces imports by around 1.4 percent. Hence the two instruments are not equivalent. Second, we build a stylized short-term macroeconomic model where the government aims at internal and external balance. We find that, in this setting, monetary policy is more stabilizing for the economy than trade policy, except when the internal transmission channel of monetary policy is muted (at the zero-lower bound). One implication is that, in normal times, a country will more likely react to a trade "aggression" through monetary easing rather than through a tariff increase. The result is reversed at the ZLB.

We consider a general equilibrium model of international trade with two layers of informational asymmetries. Private information of Home producers on costs affects the design of “behind-the-border” policies reflecting the political influence of inefficient producers. Home’s supply is contracted, causing trade, and motivating the use of tariffs. Eliminating those instruments by means of a trade agreement may become impossible once Home has also private information on its redistributive concerns. Home, when subject to strong influence by inefficient producers, might be reluctant to adopt Free Trade, which may lead to limited tariff cuts and give a role for export subsidies.

Using provisions to ease the movement of business visitors in trade agreements, we show that removing barriers to the movement of business people promotes trade. We document the increasing complexity of Free Trade Agreements (FTAs) and develop an algorithm that combines machine learning and text analysis techniques to examine the content of FTAs. We use the algorithm to determine which FTAs include provisions to facilitate the movement of business people and whether these are included in dispute settlement mechanisms. We show that provisions facilitating business travel are effective in promoting them and eventually increase bilateral trade flows. The paper provides (indirect) evidence of the role of face-to-face interaction on aggregate bilateral trade flows.

This paper introduces a causal machine learning approach to investigate the impact of the EU-Canada Comprehensive Economic Trade Agreement (CETA). We propose a matrix completion algorithm on French customs data to obtain multidimensional counterfactuals at the firm, product and destination levels. We find a small but significant positive impact on average at the product-level intensive margin. On the other hand, the extensive margin shows product churning due to the treaty beyond regular entry-exit dynamics: one product in eight that was not previously exported substitutes almost as many that are no longer exported. When we delve into the heterogeneity, we find that the effects of the treaty are higher for products at a comparative advantage. Focusing on multiproduct firms, we find that they adjust their portfolio in Canada by reallocating towards their first and most exported product due to increasing local market competition after trade liberalization. Finally, multidimensional counterfactuals allow us to evaluate the general equilibrium effect of the CETA. Specifically, we observe trade diversion, as exports to other destinations are re-directed to Canada.

Which countries should aim for regulatory cooperation, and to what extent should they pursue it? We develop an imperfectly competitive trade model that accounts for differences in technology and regulatory preferences regarding local consumption externalities across countries. Each country sets unique product standards, and firms incur costs when tailoring products to different markets. Trade occurs when the benefits of comparative advantages outweigh the desire for asymmetric regulations. Our findings indicate that regulatory cooperation, defined as the cooperative setting of standards, is most advantageous for countries with moderate differences in regulatory preferences. Shallow integration, however, falls short of achieving the optimal planner’s solution. Countries with strong comparative advantages in distinct externality-generating goods can pursue deeper regulatory cooperation through mutual regulatory concessions. Additionally, when regulatory preferences are highly dispersed, international cooperation tends to form regulatory blocs.

Stringent Technical Barriers to Trade (TBT) are expected to drive exporters out of the markets imposing these hurdles. In addition, more able multi-destination exporters can refocus on TBT-free markets and reorient their exports. By matching a database of TBT measures raised as concerns at the WTO (Specific Trade Concerns — STCs), with a firm-level panel of French exporters, we show the complex effects of restrictive TBT measures on the different margins of trade. We show that the negative effect of TBT on export participation is magnified for multi-destination firms, which can divert their exports towards TBT-free destinations. Moreover, we conduct aggregate level estimations to show that the effect of stringent TBTs in reducing export flows is magnified in more homogeneous sectors. Observing the shape of the firm distribution at sectoral level and the aggregate response of export to trade cost, we shed light on the fixed component of the additional cost imposed by TBTs on exporters.

This article provides a detailed analysis of the trade-related aspects of economic partnership agreement (EPA) negotiations for the six Africa-Caribbean-Pacific (ACP) negotiation groups including ECOWAS, CEMAC+, COMESA, SADC, CARIFORUM and Pacific. We use a partial equilibrium model–focusing on the demand side–at the HS6 level (covering 5,113 HS6 products). Two lists of sensitive products are constructed: focusing on the agricultural sectors and tariff revenue preservation. For the European Union (EU), EPAs must translate into 90% fully liberalised bilateral trade to be World Trade Organisation compatible. We use this criterion to simulate EPAs for each negotiating regional block. ACP exports to the EU are forecast to be 10% higher with EPAs, than under the generalised system of preference 'Everything But Arms' option. ACP countries, especially African ones, are forecast to lose an average of 71% of tariff revenues on EU imports in the long run. Imports from other regions of the world will continue to provide tariff revenues. Thus, if we compute tariff revenue losses on total ACP imports, losses are only 25% on average over the long run and as low as 19% if the product lists are optimised. The final impact depends on the importance of tariffs in government revenue and on potential compensatory effects. However, this long-term and less visible effect will depend mainly on the capacity of each ACP country to reorganise its fiscal base.

Using detailed information from lobbying reports filed under the Lobbying Disclosure Act, we construct a unique dataset that allows us to identify which firms lobby on Free Trade Agreements (FTAs) negotiated by the United States, their position (in favour or against) and their lobbying effort on the ratification of each trade agreement. Using this dataset, we show that lobbying on FTAs is dominated by large multinational firms, which are in favour of these agreements. On the intensive margin, we exploit exogenous variation across FTAs to show that individual firms put more effort supporting agreements that generate larger potential gains -larger improvements in their access to foreign consumers and suppliers and smaller increases in domestic competitionand that are more likely to be opposed by politicians. To rationalise these findings, we develop a new model of endogenous lobbying on trade agreements. In this model, heterogeneous firms select into trade and choose whether and how much to spend lobbying on the ratification of an FTA, and politicians may be biased in favour of or against the agreement.

Using detailed information from lobbying reports filed under the Lobbying Disclosure Act, we construct a unique dataset that allows us to identify which firms lobby on Free Trade Agreements (FTAs) negotiated by the United States, their position (in favour or against) and their lobbying effort on the ratification of each trade agreement. Using this dataset, we show that lobbying on FTAs is dominated by large multinational firms, which are in favour of these agreements. On the intensive margin, we exploit exogenous variation across FTAs to show that individual firms put more effort supporting agreements that generate larger potential gains – larger improvements in their access to foreign consumers and suppliers and smaller increases in domestic competition – and that are more likely to be opposed by politicians. To rationalise these findings, we develop a new model of endogenous lobbying on trade agreements. In this model, heterogeneous firms select into trade and choose whether and how much to spend lobbying on the ratification of an FTA, and politicians may be biased in favour of or against the agreement.

Which countries should aim for regulatory cooperation, and to what extent should they pursue it? We develop an imperfectly competitive trade model that accounts for differences in technology and regulatory preferences regarding local consumption externalities across countries. Each country sets unique product standards, and firms incur costs when tailoring products to different markets. Trade occurs when the benefits of comparative advantages outweigh the desire for asymmetric regulations. Our findings indicate that regulatory cooperation, defined as the cooperative setting of standards, is most advantageous for countries with moderate differences in regulatory preferences. Shallow integration, however, falls short of achieving the optimal planner's solution. Countries with strong comparative advantages in distinct externality-generating goods can pursue deeper regulatory cooperation through mutual regulatory concessions. Additionally, when regulatory preferences are highly dispersed, international cooperation tends to form regulatory blocs.