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Rules of Origin (RoO) are critical components of Preferential Trade Agreements (PTAs). They are designed to stop products coming into a PTA through the partner that applies the lowest tariff – a phenomenon known as trade deflection. While RoO are necessary, complex RoO may undo the benefits of trade agreements. Using a novel database of RoO, this paper evaluates the incidence and restrictiveness of different types of Product-Specific Rules of Origin (PSRs) across 128 reciprocal PTAs for the period 1990 - 2015. Results, based on a structural gravity model controlling for confounding factors, display wide heterogeneity across different categories of PSRs attached to preferential margins, with more flexible PSRs associated with a significantly stronger trade effect compared to more restrictive ones where exporters do not have a choice among PSRs or have to satisfy multiple PSRs. A simulation exercise reveals that a radical simplification reform leading to the adoption of flexible PSRs providing alternative choices to prove origin would have increased global trade under PTAs on average by between 2.7 and 4 percent during the sample period. Julien Gourdon and Jaime de Melo acknowledge financial support from the Agence Nationale de la Recherche of the French government through the program “Investissements d’avenir” (ANR-10-LABX-14-01).

Expansion of Global Value Chains (GVCs) is a mixed blessing for the environment. Effects of growth and emissions from transport associated with international trade have negative effects; but greater flows of knowledge and associated spillovers, and adoption of environmentally innovative products have positive effects. This paper provides evidence on carbon dioxide (CO2) emissions for 51 African and 132 other countries for 163 products over the period 1995‒2015. The resulting landscape is summarized in four patterns. Patterns identified for the Africa region differ from those identified for other regions but are closely related to a synthetic aggregate comparator constructed on the basis of three characteristics (per capita income, share of manufacturing in GDP, and distance to trading partners). 1: All regions have reduced emission intensities over the period 1995‒2015. Africa's share of global CO2 emissions has remained constant over the period 1995‒2015. Asia, already the region with the largest share of global emission in 1995, has strengthened its leading polluter position. Europe and the Americas have reduced their share of emissions by nine and eight percentage points, respectively. Asia is decarbonizing; Africa not yet. 2: Carbon intensity of production has increased in Africa in both decades, though much less so over the period 2005‒2015 when, on average, emissions grew less rapidly than population. Over half of the 20 African top emitting countries shifted towards more carbon-intensive techniques. 3: Source of regional total emissions: Over the period 1995‒2015, intra-regional shares of emissions fell by seven, ten, and two percentage points to 84%, 75%, and 88% for Africa, Europe, and Asia, respectively. Africa's share of emissions originating from Asia rose from 4% to 11%. Europe's share of emissions originating from Africa and Asia rose from 2% and 8% to 4% and 16%, respectively 4: The export basket of Africa is skewed towards high CO2e intensity products. CO2 emission intensities are positively correlated with both the output upstreamness (OU) and input downstreamness (ID). The OU/ID indicator of position in a supply chain is negatively correlated with CO2 emission intensities within regions. The fit is higher at the sectoral level. For manufactures, being more upstream by 1% is associated with a higher emissions intensity of 0.61%. For the other sectors, the relation is negative, and largest for Agriculture and Construction.

Strong participation in Global Supply Chains (GSCs) (aka Global Value Chains (GVCs)) is an indication of the structural transformation at the heart of the ‘Africa we want’ described in African Union’s Agenda 2063 project. We discuss challenges at measuring GSCs and report new input- output based measures (upstreamness and downstreamness of exports) at several levels: across countries, regions, and sectors over the period 1995-2015. We also report participation measures based on firm-level data and new estimates of factors affecting participation of sectors in GVCs over the period 1995-2015. On average, for both Africa and MENA, exports have a low content of imported intermediates and exports undergo further transformation in destination countries before reaching consumers. Compared with other regions, both Africa and MENA mostly engage in supply chain trade with countries outside their respective region. Firm-level estimates for several countries show that African firms are scarcely engaged in supply chain trade. In sum, in spite of regional trade agreements focussing on reducing trade barriers to intra-regional trade, regional value chains have failed to develop in both regions. [...]