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This article introduces the Global Sanctions Data Base (GSDB), a new dataset of economic sanctions that covers all bilateral, multilateral, and plurilateral sanctions in the world during the 1950–2016 period across three dimensions: type, political objective, and extent of success. The GSDB features by far the most cases amongst data bases that focus on effective sanctions (i.e., excluding threats) and is particularly useful for analysis of bilateral international transactional data (such as trade flows). We highlight five important stylized facts: (i) sanctions are increasingly used over time; (ii) European countries are the most frequent users and African countries the most frequent targets; (iii) sanctions are becoming more diverse, with the share of trade sanctions falling and that of financial or travel sanctions rising; (iv) the main objectives of sanctions are increasingly related to democracy or human rights; (v) the success rate of sanctions has gone up until 1995 and fallen since then. Using state-of-the-art gravity modeling, we highlight the usefulness of the GSDB in the realm of international trade. Trade sanctions have a negative but heterogeneous effect on trade, which is most pronounced for complete bilateral sanctions, followed by complete export sanctions.
Due to its economic size, economic policy measures, in particular trade policies, have a far‐reaching impact on global economic developments. This chapter quantifies the economic consequences of US protectionist trade aspirations. It focuses on trade policy scenarios, which have been communicated by the current US administration as potential new trade policies. The chapter draws on the results of a study of the ifo Institute conducted on behalf of the Bertelsmann Foundation. In the first simulation, a retraction from the North American Free Trade Agreement is considered. The chapter then illustrates the potential consequences of a “border tax adjustment” policy. It also simulates further measures to protect the US market by presuming an increase in American duties. The chapter presents robust quantitative results that can be expected if an increasingly protectionist US trade policy were to be implemented.
When a country grants preferential tariffs to another, either reciprocally in a free trade agreement (FTA) or unilaterally, rules of origin (RoOs) are defined to determine whether a product is eligible for preferential treatment. RoOs exist to avoid that exports from third countries enter through the member with the lowest tariff (trade deflection). However, RoOs distort exporters' sourcing decisions and burden them with red tape. Using a global data set, we show that, for 86% of all bilateral product-level comparisons within FTAs, trade deflection is not profitable because external tariffs are rather similar and transportation costs are non-negligible; in the case of unilateral trade preferences extended by rich countries to poor ones that ratio is a striking 98%. The pervasive and unconditional use of RoOs is, therefore, hard to rationalize.
