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The CEPII Newsletter       
February 2020        

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

The ‘Phase One Deal’: a truce that creates more problems than it solves

The trade agreement signed on the 15th of January between China and the United States is nothing more than a truce. It leaves additional tariffs on roughly two-thirds of US imports from China in place. Chinese pledges to purchase American products should help to reduce the bilateral trade deficit, but they will not necessarily bring back manufacturing industries to the US. They will, however, hurt third countries. Commitments on intellectual property rights, technology transfers and financial services will increase investment in China by American companies, if they have any significant impact at all. And China’s commitments to partially align with US practices on sanitary and phytosanitary standards, however sensitive they may be, will only have limited commercial consequences in terms of scope and will be restricted to the agricultural sector. In the absence of a dispute settlement system with credible institutions, the agreement fails to achieve lasting stability. A central problem, industrial subsidies, is not addressed, and the prospect of a ‘Phase Two’ agreement appears nebulous and uncertain. The agreement is yet another step that will destabilize the multilateral trading system, as it subjects trade relations to the bilateral political balance of power.
Sébastien Jean


EQCHANGE Annual Assessment 2019

This publication, accompanying the 2019’s update of EQCHANGE, aims at providing an overview of exchange rate misalignments for 2018. In a nutshell, 2018 has been characterized by relatively minor movements in exchange rate misalignments except few EMEs that registered important downward movements owing from the exchange rate depreciations. This is especially the case of Turkey, and to a lesser extent, Brazil, India, Indonesia and Russia. In contrast, most of the major currencies registered a slight appreciation vis-à-vis the US dollar that generally translated in upward movements in currency misalignments. The euro area is again featured two opposite situations with Finland Germany, Ireland and the Netherlands displaying noticeable undervaluations.
Carl Grekou


  Facts & Figures

Does Birthplace Diversity affect Economic Complexity? Cross-country Evidence

Dany Bahar, Hillel Rapoport & Riccardo Turati's cross-country analysis suggests that birthplace diversity is strongly and positively associated with economic complexity. This holds particularly for diversity among highly educated migrants and for countries at intermediate levels of economic complexity. The results are robust to accounting for previous trends in birthplace diversity as well as to using alternatives diversity measures. Finally, they provide evidence suggesting that birthplace diversity boosts economic complexity by increasing the diversification of the host country’s export basket.

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