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"International trade has been cited as a source of widening wage inequality in industrial nations. Most previous empirical evidence supports this claim by showing an effect in which increasing exports tilt demand towards firms which export and employ a relatively large proportion of higher-skilled workers from the group of firms which do not export. We find that, in addition to this, there is also an effect whereby, among exporting firms, there is a significant wage premium for high-skilled workers and a wage discount for low-skilled workers. These estimates are based on a matched employer–employee data set of western German manufacturing firms over the period 1993–2007. Our estimates suggest that export activity can be associated with up to 30% of within and between skill group wage inequality."

"A deep, comprehensive and ambitious TTIP should not undermine or otherwise negatively affect the WTO and its signatories. Among other things, this means that trade diversion ought to be minimised and positive spillovers stimulated. The present CEPS Special Report provides some elementary quantification, which helps to understand the economic incentives for third countries to seek regulatory alignment with TTIP results, where relevant, and for which TTIP should be ‘open'. It focuses on ‘indirect' spillovers and employs a rather aggregate economic approach. We find that, of three groups of countries that are important for trade with the EU and the US, the ‘closest' neighbours (NAFTA, EEA, Switzerland and Turkey) exhibit powerful incentives to align so as to benefit from positive spillovers. This is less clear for two other groups. Of the (seven) ‘biggest traders' (in manufactured goods, for which spillovers matter most), China turns out to have the greatest interest in alignment in selected sectors, followed by Israel, Japan and South Korea. Whereas the latter three either have or are negotiating FTAs with the US and the EU, precisely China has none and remains outside TPP as well. In terms of sectors, the chemical sector followed by electronic equipment are by far the most important, with agro-products and fish as a good third (SPS issues). However, in chemicals and electrical equipment, the TTIP negotiations so far, and recent US/EU regulatory cooperation, do not indicate an ambitious approach, which could reduce regulatory barriers to market access drastically."

"It is well known that the performance of foreign firms compared to domestic companies is superior with respect to employment, wages, and productivity. In this paper we detail the export behaviour of foreign affiliates in the United Kingdom relative to indigenous firms. Our findings show that foreign firms are more likely to export, and when they do so they are more export intensive and overall contribute disproportionately to total manufacturing exports from the UK. While firm-level advantages explain some of these differences in export behaviour, strategic considerations dominate, where these include the differential in costs, productivity, and market size between the UK and foreign countries. That is, both horizontal and vertical motives can be found for the use of the UK as an export platform by foreign firms."

"The paper examines how Canadian manufacturing plants have responded to reductions in tariff barriers between Canada and the rest of world over the past two decades. Three main conclusions emerge from the analysis. First, trade liberalization was a significant factor behind the strong export growth of the Canadian manufacturing sector. As trade barriers fell, more Canadian plants entered the export market and existing exporters increased their share of shipments sold abroad. Second, export-market participation was associated with increases in a plant's productivity growth. Third, our analysis identified the presence of three main mechanisms through which export-market participation raises productivity growth among plants: learning by exporting; exposure to international competition; and increases in product specialization that allowed for exploitation of scale economies. Our evidence also shows that plants that move into export markets increase investments in R&D and training to develop capacities for absorbing foreign technologies and international best practices. Finally, entering export markets leads to increases in the number of advanced technologies being used, increases in foreign sourcing for advanced technologies, and improvements in the information available to firms about advanced technologies. It is also associated with improvements in the novelty of the innovations that are introduced."

"This paper investigates various aspects of the links between exporting and productivity for a large sample of firms in the United Kingdom. We find evidence to support the proposition that sunk costs are important. Self selection takes place, with larger and more productive firms entering export markets, and firms have to become more productive in order to enter. Industry characteristics also affect the likelihood of entry—both industrial and spatial agglomeration are important. When we rely on an unmatched sample of firms we can find some evidence of further productivity improvement after entry, but this disappears when we use a matched sample. Our results suggest that policy should avoid simply subsidizing firms that may self select into export promotion policies and focus instead on reducing information asymmetries and supporting development of clusters."

"The COVID-19 pandemic has caused a dramatic shortage in the medical supplies needed to treat the virus due to a massive surge in demand as the disease circled the globe during the first half of 2020. Prior to the crisis, there was an interdependence of trade and production for medical supplies, with advanced industrial countries like the United States and Germany specializing in the relatively high-tech medical devices sector, while low-cost production hubs such as China and Malaysia were leading producers of less technologically sophisticated personal protective equipment (PPE) products such as face masks, surgical gloves, and medical gowns. After the COVID-19 outbreak, global shortages of PPE products emerged as many affected countries imposed export controls and sought ways to boost domestic output. A case study of the face mask value chain in the United States shows misalignments between the priorities of U.S. federal government officials and the strategies of leading U.S. multinational producers of face masks, which resulted in exceptionally costly policy delays in terms of health outcomes. On balance, the U.S. shortage of N95 respirators during the COVID-19 pandemic is more a policy failure than a market failure. The global value chain framework highlights strategic options that could lead to more resilient supply chains and diversified sourcing patterns."