Do We Need Deeper Trade Agreements for GVCs or Just a BIT?

27 Pages Posted: 6 Jun 2020

See all articles by Mauro Boffa

Mauro Boffa

European University Institute - Robert Schuman Centre for Advanced Studies (RSCAS)

Marion Jansen

International Trade Centre

Olga Solleder

International Trade Centre (ITC)

Date Written: June 2019

Abstract

The paper investigates two policies geared towards stimulating and shaping global value chains (GVCs), namely deep regional trade agreements (DRTAs) and bilateral investment treaties (BITs). In an augmented gravity model, we test the impact of both policies on a variety of trade in value added indicators. We find that both policies are likely to increase GVC trade, although their transmission channels differ. While backward linkages are stimulated through both BITs and DRTAs, forward linkages respond only to DRTAs. The estimates suggest that negotiating a DRTA with investment provisions has a higher impact on trade in value added than signing a shallow RTA and a separate BIT.

Keywords: bilateral investment treaties, deep trade agreements, economic integration, global value chains, trade policy

Suggested Citation

Boffa, Mauro and Jansen, Marion and Solleder, Olga, Do We Need Deeper Trade Agreements for GVCs or Just a BIT? (June 2019). The World Economy, Vol. 42, Issue 6, pp. 1713-1739, 2019, Available at SSRN: https://ssrn.com/abstract=3620333 or http://dx.doi.org/10.1111/twec.12766

Mauro Boffa (Contact Author)

European University Institute - Robert Schuman Centre for Advanced Studies (RSCAS) ( email )

Villa La Fonte, via delle Fontanelle 18
50016 San Domenico di Fiesole
Florence, Florence 50014
Italy

Marion Jansen

International Trade Centre ( email )

54-56 Rue de Montbrillant
Geneva
Switzerland

Olga Solleder

International Trade Centre (ITC) ( email )

54-56 Rue de Montbrillant
Geneva
Switzerland

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
0
Abstract Views
84
PlumX Metrics