From the Editor

The International Trade Journal, Vol. 32, No. 5 (November - December 2018)

Dear Readers,

Welcome to the final issue of Volume 32 of The International Trade Journal (ITJ). The articles in this issue look at how rules of origin (ROOs) affect gains from free trade agreements, how corruption affects international businesses, how the Aid for Trade (AfT) program interacts with trade liberalization, and how distance affected France’s international trade before World War I.

The number of bilateral and multilateral free trade agreements has increased greatly in recent years.¹ The first article, by Alan V. Deardorff, shows that ROOs can reduce, or even reverse, potential gains from bilateral free trade agreements. Even if all countries have bilateral free trade agreements with all other countries, consumers might be worse off than they would be in a world with positive tariffs when the agreements have ROOs requirements. The problem is that a country might inefficiently produce intermediate inputs to ensure that the final product meets the ROOs requirements in its bilateral free trade agreements rather than importing the intermediate inputs from third countries that could produce them more efficiently.

The second article in the issue, by Alex Kouznetsov, Sarah Kim, and Justin Pierce, surveys the large and growing international business literature on the causes and consequences of corruption. The authors survey 78 published studies on corruption, dividing the articles into three groups: articles that discuss factors that contribute to corruption, articles that discuss the consequences of corruption for firm performance and behavior, and articles that discuss ways to combat corruption. The authors also identify areas in which further studies are needed.

The third article, by Sena Gnangnon, looks at how aid through the AfT program affects trade liberalization.² The study shows that developing countries that received more aid through the AfT program subsequently liberalized trade more than countries that received less aid. The effect was particularly strong for countries at lower levels of economic development. Although all types of aid through the program were correlated with subsequent liberalization, aid dedicated to trade policy and regulations was the most highly correlated with liberalization.

The final article in this issue, by Stephane Becuwe, Bertrand Blancheton, Leo Charles, and Matthieu Clément, looks at France’s imports and exports before 1914. The study notes that France’s relative share of world exports was declining over this period and that France’s trade deficit was growing. The authors argue that France had particular problems with respect to its trade outside of Europe and North Africa. Although distance was becoming less important for imports into France and Germany and for exports from Germany, the same was not true for French exports. The authors discuss several possible explanations for this, including information and networks, competitiveness, and commercial strategy.

As usual, I would like to acknowledge the people without whom the ITJ would not succeed. I would like to thank the authors for their contributions; the anonymous referees for the detailed and timely comments they provide; the team at the International Trade Institute at Texas A&M International University that ensures that submissions are processed quickly and efficiently; our editorial board for its expert guidance; and our publisher, Taylor & Francis, for ensuring the high quality of the ITJ.

Notes

¹ Several recent articles in the ITJ, including Ciuriak, Lysenko, and Xiao (2015), Kaitibie and Rakotoarisoa (2017), Rahmouni and Debbiche (2017), and Wang (2016), have looked at specific bilateral or regional free trade agreements.

² In an earlier article, Gnangnon (2018) showed that aid givers tend to allocate more AfT aid to countries to which they also grant more generous trade preferences.