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Trade

The Trade programme studies the effects of globalisation and trade policy on workers, firms and economies. It analyses the market power of global firms, the role of international trade agreements, and the impact of Brexit on the UK and EU.

Globalisation dramatically increases flows of goods, services, ideas, investments and people, across national borders.

CEP's research on trade seeks to understand the causes and consequences of these flows and the ways in which policy shapes and responds to them.

Our early research based around the new economic geography looked at the role of local resources and technologies and of the cost of doing business at a distance in explaining the economic geography of nations and regions.

Later research placed more emphasis on the role of firms and how differences across firms helped us better understand why exporters are more productive than non-exporters and how the impact of trade liberalisation would be felt unequally across firms. Why are some firms able to expand and access overseas markets to reach customers and set up globalised production processes while other firms are forced out of business? The way in which firms relocate different stages of the production process and restructure operations internationally by outsourcing and offshoring activities has been the focus of our work on global value chains.

The uneven impacts of trade are felt not only by firms but also by households. Integrating national economies affects wages and prices across the economy, and some workers will be made better off and some worse off as a result. Recently developed tools allow researchers to study inequality in the distribution of these gains from trade in more detail than was previously possible. To understand the economic forces at work CEP research combines these new theoretical models with many different data sources, providing information at country, industry, firm, and even transaction level.

Along with technology and geography, politics and regulations also determine the opportunities and the costs of economic integration, as well as how the gains are shared. Our work on Brexit, and on trade policy more generally, puts these questions to the fore.


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