Dr. Nan Xu Attends the ETSG Annual Conference


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(Correspondent: Nan Xu) Dr. Nan Xu attended the 21st European Trade Study Group (ETSG) annual conference at Bern, Switzerland during September 12 to 14, 2019, and presented her paper The Distortionary Impacts of Rules of Origin on Labor Market and Country Welfare. This paper investigates the impacts of rules of origin (ROOs) on labor market and country welfare in the context in which there is a vertical production linkage between FTA members. By developing a general equilibrium model featuring both variable and fixed costs of complying with ROOs, the paper finds that a slightly binding ROO encourages regional production and trade, the wage rate in the downstream country decreases as ROO becomes stricter, and the welfare effects of ROOs are ambiguous depending on the elasticity of substitution between varieties. The European Trade Study Group (ETSG) is a forum for academic discussion and research on international trade among universities and research institutes. Attendees showed their recent work on a variety of topics at the conference, including trade policy, firm heterogeneity, multinational firms and global value chains.