Search

The article presents central findings from our book "Free Trade Is Finished," which discusses the trade-off between security and economic policy objectives that has become apparent in recent years. We analytically derive which goods are to be classified as "critical" and formulate three criteria for this: no substitutability in the short term; immediate relevance for consumption; forced rationing in the event of a crisis or the existence of external effects. If these criteria are met, state interventions such as concentration tariffs or capacity markets can solve the procurement problem. In terms of game theory, trade wars can also be avoided by understanding foreign dependencies as a potential weapon in such disputes. [ABSTRACT FROM AUTHOR]

Supply security is threatened by technical, business, natural and policy shocks, as well as geopolitical tensions. Is there a rationale for policy intervention? If yes, what are efficient and effective measures that achieve de-risking? This article first explains why private incentives do not generally lead to an optimal diversification of supply sources, and then discusses measures that strengthen protection against and resilience in the face of shocks. Governments should refrain from policies that further disincentivise diversification such as the ex post skimming of excess profits when adverse shocks force the halt of production and should work on framework conditions that facilitate diversification. Importantly, most measures are best taken at the EU level. [ABSTRACT FROM AUTHOR]

The article discusses the EU Directive on Corporate Sustainable Due Diligence, exploring concerns about the potential privatization of compliance costs in complex supply networks, especially in countries with weak enforcement mechanisms. It proposes options to enhance the directive's effectiveness, such as excluding countries with sufficient regulatory systems, focusing on supplier-buyer relationships, and implementing a private certification scheme.

Would the United Kingdom really apply high EU external tariffs in the case of a hard Brexit and carry out extensive physical checks at their border? Recent developments in London call this into question. A hard-but-smart strategy would fundamentally change Britain's position vis-à-vis the EU and potentially result in a constructive alternative. [ABSTRACT FROM AUTHOR]

The logic for multilateral cooperation in trade and beyond becomes stronger, not weaker. A new governance forum will emerge, where negotiating will take place in country clubs instead of among members at the WTO.However, by breaking protocol, the US president has gained substantial bargaining power, because he puts himself in a situation in which he actually has to implement his threats if the negotiation counterparts do not confirm in order to save face on the domestic and global stages. [ABSTRACT FROM AUTHOR]

In the traditional model of international trade, labour market reforms in one country are often viewed as beggar-thy-neighbour policies, because they negatively affect the competitiveness and employment levels of the country's trading partners. Empirical evidence, however, suggests that this is not the case. By addressing labour market reforms in the context of intra-industry trade, this article explains how such reforms, while boosting employment, ultimately reduce a country's terms of trade, thereby benefitting the country's trading partners. The authors call for more international policy coordination to achieve optimal outcomes. [ABSTRACT FROM AUTHOR]