Deconstructing global trade: the role of geopolitical alignment

Han Qiu, Fan Dora Xia and James Yetman

BIS Quarterly Review, 2024

Abstract: Globalisation is threatened as countries impose trade restrictions, especially against trading partners with large geopolitical differences. This feature gauges the impact of this development on trade flows using granular bilateral trade data across finely disaggregated sectors. We find that geopolitical distance – based on country votes at the United Nations – helps explain recent trade dynamics. The impact is sizeable: over 2017–23, we estimate that quarter-on-quarter trade volumes grew around 2.5% more slowly for geopolitically distant countries relative to those that were closer. We also assess how vulnerable individual countries are to an intensification of geopolitical tensions.

JEL-codes: F13 F14 F15 F51 F60 (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (1)

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