Walsh School of Foreign Service

IBD Professors Featured in the Financial Times

VoxEU article by IBD Director Rodney Ludema, Wallenberg Chair Nuno Limão, and colleagues was featured in the Financial Times in its February 26th issue.

Professor Ludema and Professor Limão’s original article discusses how trade policy uncertainty (TPU) and skepticism amongst policy makers deters investment in global supply chain integration, manifesting in fragmented and concentrated supply chains. It highlights the role of the World Trade Organization (WTO) commitments as a device to reduce TPU and bolster investment in global supply chains. Through an analysis of the effects of China’s WTO accession on trade, the authors find that the reduction in TPU post-accession had a stronger impact on import decisions than tariff reductions alone. They suggest that reduced credibility and trust in WTO commitments and other regional or multilateral trade agreements may lead to a decrease in investment and integration into global supply chains.