Trade policy responses to the COVID-19 pandemic crisis: Evidence from a new data set.

This paper presents new high-frequency data on trade policy changes targeting medical and food products since the beginning of the COVID-19 pandemic, documenting how countries used trade policy instruments in response to the health crisis on a week-by-week basis. The data set reveals a rapid increase in trade policy activism in February and March 2020 in tandem with the rise in COVID-19 cases but also uncovers extensive heterogeneity across countries in both their use of trade policy and the types of measures used. Some countries acted to restrict exports and facilitate imports, others targeted only one of these margins, and many did not use trade policy at all. The observed heterogeneity suggests numerous research questions on the drivers of trade policy responses to COVID-19, on the effects of these measures on trade and prices of critical products, and on the role of trade agreements in influencing the use of trade policy.

Facilitating Sustainable Investment To Build Back Better

Foreign direct investment (FDI) flows are at a low point as a result of not only the COVID-19 pandemic but also restrictive FDI policies adopted in recent years. Investment facilitation has gained in importance as a set of practical measures to increase the transparency and predictability of investment frameworks and promote cooperation to advance development. Investment facilitation can help to reduce the transactional and administrative costs faced by foreign investors and contribute to a resilient and sustainable economic recovery. Discussions on a distinct set of investment facilitation policies and measures have gained momentum in recent years. Negotiations are undertaken at the bilateral and regional levels, for example, in the context of the Regional Comprehensive Economic Partnership (RCEP) or the Sustainable Investment Protocol of the African Continental Free Trade Agreement (AfCFTA). Another important initiative is underway among members of the World Trade Organization (WTO) which are negotiating an Investment Facilitation Framework for Development. This article develops a set of key recommendations for policy-makers on how investment facilitation frameworks can be designed to help attract sustainable FDI for sustainable development and recovery in general. These recommendations can be summarized in three guiding principles: contribute directly to sustainable development, focus on conflict prevention and management, and learn from experiences from other processes such as trade facilitation.

Value chain approaches to reducing policy spillovers on international business

Government policy can add to the costs of doing international business. It can distort the construction of and raise the costs of operation of global value chains (GVCs), to the detriment of the participating economies. Given rising technological and market-driven headwinds confronting GVCs, countries seeking to attract GVC activities have greater incentives to identify and address policies that negatively affect international business investment. Cooperation of businesses with regulators, analysts, and researchers has the scope to develop better policy. This paper suggests principles for the design and operation of such cooperation, drawing on the experience with multi-stakeholder value chain partnerships and the policy responses to the 2020 COVID-19 pandemic.

Rethinking International Subsidy Rules

Abstract Geo-economic tensions, notably associated with the rise of China, and global collective action problems ? climate change;the COVID-19 pandemic ? call for international cooperation to revise and develop rules to guide both the use of domestic subsidies and responses by governments to cross-border competition spillover effects. Current WTO rules dividing all subsidies into prohibited or actionable categories are no longer fit for purpose. Piecemeal efforts in preferential trade agreements and bi- or trilateral configurations offer a basis on which to build but are too narrow in scope. Addressing spillover effects of subsidies could start with G20 countries launching a work program to mobilize an epistemic community concerned with subsidy policies, tasked with building a more solid evidence base on the magnitude, purpose and effects of subsidy policies. The need for such cooperation has become even more pressing by the COVID-19 pandemic and associated increase in the use of subsidy programs in major economies.