UNCTAD/WTO "An Advanced Guide to Trade Policy Analysis - The Structural Gravity Model"The United Nations Conference on Trade and Development (UNCTAD) and the World Trade Organization (WTO) launched the second volume in their book series on trade policy analysis on November 15.  The book is yet another outcome of the cooperation between the UNCTAD Virtual Institute (Vi) and the WTO for the benefit of academics and policymakers in developing countries and countries with economies in transition.

“The partnership with the WTO began at the inception of the Virtual Institute in 2004,” said Richard Kozul-Wright, Director of UNCTAD’s Division on Globalization and Development Strategies. “The cooperation was further strengthened in 2010, when the WTO launched its WTO Chairs Programme, whose network of 19 universities includes 13 of the Vi’s 131 institutional members.”

The idea for the book began to take shape in 2005, when the Vi, the International Trade Centre and the WTO held an international workshop on trade policy analysis for 20 academics from 15 developing countries. The Vi then developed a teaching material on the topic in 2008, which served as the basis of the first volume in the series, “A Practical Guide to Trade Policy Analysis.”

“In the first year alone, the book had been used by 19 Vi universities to teach more than 2,000 students,” Kozul-Wright said.

Since then, the book has been adapted by Vi academic institutions to the contexts of Cameroon, China and Pakistan and has been the topic of workshops for academics in South Africa, Ghana, Bangladesh, Kenya, Senegal, Tanzania and Gambia.

The book has also become an integral part of programmes in economics at Vi member universities, supported policy-relevant research projects of Vi academics, as well as South-South teaching exchanges, and Vi online courses and multimedia teaching resources. These outcomes have been made possible by generous support from donors such as the UN Development Account, and the governments of Finland and Spain.

Volume 2 in the series, “An Advanced Guide to Trade Policy Analysis: The Structural Gravity Model,”   extends some of the methods explored in the first book:  the gravity and general equilibrium models. It was written by international experts, Yoto V. Yotov, Roberta Piermartini, José-Antonio Monteiro, and Mario Larch.

“The book incorporates the partial and general equilibrium perspectives into the gravity model to analyze the concrete policy questions put forward in the first book,” said WTO’s Piermartini.

 “We are pleased with this new publication, which addresses one of the capacity-building topics most requested by Vi members, the gravity model,” said Kozul-Wright. “The book will  be distributed by the WTO and the Vi to their networks of academics, as well as to other Vi members, which include policymakers, government institution researchers, trade practitioners and students around the world.

“The users of the guide need to be aware, of course, that the partial and general equilibrium approaches to modeling international trade outlined in the volume do not exhaust our understanding of the complex relationships between trade and development,” Kozul-Wright added. “Given that development is a non-linear and non-continuous historical process that can be poorly specified when outcomes have to be squeezed in to an equilibrium framework, practitioners have to be aware of its limitations.

“Accordingly, a full understanding of trade analysis and empirics will need to draw on multiple tools and models. Developing and disseminating these will be a new challenge for UNCTAD and the Vi moving forward,” he said.

A third component of this continuing work, focusing on the analysis of Non-Tariff Measures, will be available soon. This material, co-authored by Marco Fugazza, of UNCTAD’s Trade Analysis Branch, is already at the core of the Vi’s latest online course, currently in progress.

The Vi has also developed its first Massive Open Online Course, “Introduction to Stata for Trade Policy Analysis,” scheduled for delivery in the first quarter of next year. Authored by former Vi economist, UNCTAD’s Julia Seiermann, the goal of the course is to bridge the knowledge gap of participants in Vi workshops and online courses on econometric analysis, as well as users of Vi teaching materials, which center around hands-on applications using the Stata software.

Serafino Marchese, of the WTO’s Institute for Training and Technical Cooperation, welcomed the Vi course, as it will provide key skills for participants of the organization’s “Thematic Course on Trade Policy Analysis.”

“The Vi will continue to expand capacity-building activities on trade analysis, and incorporate other methodologies to analyze topics such as trade sophistication and value chains,” Kozul-Wright added. “We have already implemented this approach with the recent publication of the Virtual Institute teaching material on structural transformation and industrial policy, which is also the subject of a new Vi online course to be delivered next year.”