Towards demystifying trade dependencies: At what point do trade linkages become a concern?

Christine Arriola, Mattia Cai, Przemyslaw Kowalski, Sébastien Miroudot and Frank van Tongeren

No 280, OECD Trade Policy Papers from OECD Publishing

Abstract: Supply chain disruptions, related to natural events or geopolitical tensions, have in recent years prompted policy makers to identify potential vulnerabilities related to critical trade dependencies. These are commercial links that could potentially impose significant economic or societal harm, be a source of coercion, a risk to national security, or disrupt strategic activities. Using three complementary methodologies — detailed trade data analysis, input-output data techniques, and computable general equilibrium (CGE) modelling — this paper examines the nature and evolution of trade dependencies between the OECD countries and major non-OECD economies (MNOE). It shows that global production has become increasingly concentrated at the product level, with China representing 15% of import dependencies in strategic products for OECD countries in 2020-21 compared to 4% in 1997-99. The methodologies used in this paper unanimously demonstrate a high degree of trade interdependency between OECD and MNOE countries. The current debate on “de-risking” international trade, therefore, needs to carefully consider the possible costs and benefits of different policy choices.

Keywords: Computable equilibrium analysis; Global supply chains; Global value chains; Input-output analysis; International trade; Market concentration; Supply concentration (search for similar items in EconPapers)
JEL-codes: C67 C68 F14 F15 F6 (search for similar items in EconPapers)
Date: 2024-04-17
New Economics Papers: this item is included in nep-cna and nep-int
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://doi.org/10.1787/2a1a2bb9-en (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:oec:traaab:280-en

Access Statistics for this paper

More papers in OECD Trade Policy Papers from OECD Publishing Contact information at EDIRC.
Bibliographic data for series maintained by ().