The Economic Impact of Geoeconomic Fragmentation of Commodity Markets

Francis Mark A. Author_Email: Quimba and Mark Anthony A. Author_Email: Barral

No DP 2025-49, Discussion Papers from Philippine Institute for Development Studies

Abstract: This study develops a multidimensional Geoeconomic Fragmentation (GEF) Index and applies structural gravity modeling to quantify how rising geopolitical tensions, sanctions, and supply chain disruptions reshape ASEAN and Philippine commodity trade. Using dyad–product–year data (2000–2024), the GEF index integrates political distance, sanctions exposure, tariff barriers, trade intensity, and import volatility. A suite of Poisson Pseudo-Maximum Likelihood (PPML) models—including baseline, structural, and bloc-interaction specifications—captures how fragmentation and global shocks (such as the trade war, COVID-19, the Russia–Ukraine war, and the chip and shipping crises) differentially affect trade with China, the EU, the US, and the rest of the world. Results show that fragmentation reroutes rather than reduces trade, generating asymmetric losses across commodities and identifying highly vulnerable export and import lines for ASEAN and the Philippines. Comments to this paper are welcome within 60 days from the date of posting. Email publications@pids.gov.ph.

Keywords: ASEAN trade; commodity vulnerability; geoeconomic fragmentation; gravity model; international trade; political distance; sanctions; supply-chain shocks; tariff barriers; trade diversion; trade intensity (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:phd:dpaper:dp_2025-49

DOI: 10.62986/dp2025.49

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