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Working Paper
On Trade Policy Preference and Offshoring Ties
This paper unpacks the role of the domestic content of imports as a novel source of policy interdependence along the global supply chain. We show how a rise in local contents embodied in imports can skew national trade policy preferences, and pull upstream and downstream countries in asymmetric ways with respect to (i) the nature of unilaterally optimal trade policy prescriptions, and (ii) the attractiveness of leveraging market access-based dispute settlement procedures. We discuss the pros and cons of deep trade integration as a remedy, involving well-enforced labor standards both upstream ...
Working Paper
On Terms of Trade, Offshoring Ties, and the Enforcement of Trade Agreements
This paper unpacks the role of offshoring in the enforcement of trade agreements. In a two-country model of task offshoring, we show that by depressing demand and thus demand for embodied labor, own-tariff effects on factor content weighted terms of trade are: (i) negative in upstream countries, backfiring on upstream workers, and (ii) positive in downstream countries which render imported labor tasks even cheaper. This progression in own-tariff effects on terms of trade along the supply chain presents a novel challenge to the effectiveness of dispute settlement rules designed to nullify ...