The Political Economy of World Trade

For years, the Doha Round of the Word Trade Organisation has been stalled. U.S. President Donald Trump has pulled the United States out of the Transpacific Trade Agreement. Negotiations for a Transatlantic Trade and Investment Partnership are put on ice. At the G7 Summit in late May, the G7 countries barely agreed to reiterate their support for open markets. What is going on? Are we facing the end of the post World War II global trading order?

Following up on the introductory economics class of the first semester, "The Political Economy of World Trade" aims at providing a more hands-on approach to the analysis of economic problems. This track of the States & Markets course has a strong policy orientation, using current issues and challenges in trade policy-making as the starting point of each session. Economic research and theoretical elements will be studied to come to concrete policy options.

We start our class with an introduction to trade theory, asking why countries trade. We then venture into empirics, identifying the drivers of trade. In this context, we will analyze global and regional trade patterns as well as the effects of the financial and economic crisis on trade. Another session of our class will be devoted to the political economy of trade, before we discuss the effects of the WTO and preferential trade agreements on world trade, analyzing the merits of pursuing a multilateral and bilateral/regional trade strategy. One session will be devoted to the WTO and the Doha Round: Who would benefit, who would loose from a conclusion of the trade talks? And why is it so difficult to find a compromise to finish the round? Subsequently, we will also learn how trade disputes are settled by the WTO. We will also take a closer look at U.S. and EU trade policy.

This course is for 2nd year MIA and MPP students only.