The paper
This article connects trade-policy changes to global value-chain trade through a multi-country, multi-sector model with input-output links. An application examines the contribution of improvements in trade facilitation between 2015 and 2019.
Research findings
- The model traces changes in trade costs through production networks and distinguishes value-chain trade from total exports.
- The trade-facilitation counterfactual accounts for just over one-third of the observed global increase in value-chain trade over 2015–2019, with substantial differences across sectors and countries.
Policy takeaways
- Assess border reforms through their effects on production networks and intermediate inputs, as well as on aggregate trade.
- Use models with explicit input-output links when evaluating value-chain policies, so changes in final demand and intermediate sourcing are considered together.