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The CEPII Newsletter       
April 2023        

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

IMF World Economic Outlook 2023: Short-term and longer term outlook for the global economy in an increasingly fragmented world

The latest edition of the IMF's World Economic Outlook provides an update for the short and long term. Short-term growth prospects are still hampered by the continued burden of high inflation and the consequences of the invasion of Ukraine triggering wider geopolitical tensions and supply-chain disruptions. More recently, questions have emerged - at least in some countries - about financial stability. Growth may also be affected by the increasing fragmentation of the global economy. The IMF studies in depth the consequences of the growing concentration of foreign direct investment along geopolitical lines, which could affect more directly emerging and developing economies. Discussion with Mehdi Benatiya Andaloussi and Andrea F. Presbitero, economists at the IMF and co-authors of the World Economic Outlook 2023, Jérôme Héricourt, Scientific Advisor, Macroeconomics and International Finance Program, CEPII, and Antoine Bouët, Director, CEPII.


The Unintended Consequences of High Regional Content Requirements

Rules of origin are a common feature of regional trade agreements that fall short of full custom unions. Two of the most important trade agreements, the North American Free Trade Agreement (NAFTA) and the European Union (EU), recently enacted major changes to those rules. The 2020 USMCA agreement replacing NAFTA made those rules much stricter. Meanwhile, following its exit from the EU customs union, Britain and the remaining EU27 had to draw up new rules of origin for the EU-UK Trade and Cooperation Agreement (TCA). This paper quantifies the main trade-offs involved in setting the strictness of rules of origin in the context of the automobile industry. A more stringent agreement can raise or lower regional parts production, but it inevitably raises prices. By Keith Head, Thierry Mayer and Marc Melitz

ISSN: 1255-7072
Editorial Director : Antoine Bouët
Managing Editor : Evgenia Korotkova