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The CEPII Newsletter       
December 2018        



The French edition is slightly different as it also includes material available in French only  

Europe Monnaie & Finance Trade & Globalization Migrations Economic Policy Emerging Economies Competitivness & Growth Environment & Natural Ressources
  Focus

Why the WTO needs reform

The world trading system is probably facing its most serious crisis since World War II. With significant disagreements about rules and their interpretation, multiplying unilateral measures, and the paralysis of appointment of members at the Appellate Body of its Dispute Settlement Body (DSB), the World Trade Organization (WTO) finds itself in a critical situation, where its existence, or at least its relevance, seems called into question. This threat should be taken very seriously. While the benefits of a rules-based trading system are widely recognized, it should be emphasized that the capacity of the present system to make commitments clear and enforceable is unprecedented. Rather, historical precedents were in many cases characterized by uncertainty, unreliability, and in many cases unfairness, with widespread political interference. Falling back to disorganized and unpredictable trade relationships would be especially costly at a time where international economic relationships are as close as ever, with global value chains ubiquitous. Still, the only guarantee against such a leap backward is the willingness of the organization’s members to find a way to adapt it to today’s challenges.
Sébastien Jean
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  Edito




Deep PTAs, Global Value Chains and Migration

Preferential trade agreements (PTAs) can be used by signatory countries to manage international migration flows and participation in global value chain. The inclusion of an additional provision in PTAs stimulates the bilateral fragmentation of production by 1 percent, while PTAs that facilitate visa and asylum administrative procedures stimulate bilateral migration by up to 34 percent.
Gianluca Orefice

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  Facts & Figures




The sovereign risk shock

This paper studies the behavior of euro area asset market co-movements during the period 2010-2014, through the lens of a DSGE model. The simulation results indicate that the sovereign risk shock explains 50% of the increase in sovereign and loandeposit spreads, and 8% of the decrease in global output during the sovereign debt crisis.
Erica Perego

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CEPII is a member of the European Network for Economic and Fiscal Policy Research, a unique collaboration between policy-oriented university and non-university research institutes that are contributing their scientific expertise to the debate over the EU’s future design.
Read the November issue of the EconPol Europe Newletter.



ISSN: 1255-7072
Editorial Director : Christophe Destais
Managing Editor : Dominique Pianelli