WTO-IMF Trade Policy Activity Index: Capturing Global Trade Policy Dynamics

Strategic Insights -

A new WTO-IMF trade policy activity index has been developed to capture global trade policy dynamics in a timely and comprehensive fashion. Using a Dynamic Factor Model, the index draws insights from a wide range of information on trade policy measures covering a large number of economies and products. The index has shown that trade policy activity remained relatively flat for over a decade, but noticeably increased from around 2019-2020 onwards, reflecting heightened use of trade policy for broader objectives such as environmental sustainability, industrial policy, or security.

Key Takeaways:

  • The WTO-IMF Trade Policy Activity (TPA) index captures global trade policy dynamics using a Dynamic Factor Model, drawing insights from a wide range of information on trade policy measures.
  • The index has shown that trade policy activity remained relatively flat for over a decade, but noticeably increased from around 2019-2020 onwards, reflecting heightened use of trade policy for broader objectives.
  • The index captures cyclical patterns and temporal peaks, such as US-China tariffs (2018-2019), the onset of the COVID-19 pandemic (2020), the war in Ukraine (2022), and the recent imposition of tariffs.
  • The index differs across categories of trade policy measures, with a clear spike in trade-facilitating measures following the implementation of the WTO's Trade Facilitation Agreement in 2017.
  • The index provides robust results across a large range of specifications and has the potential to fill an important gap in trade policy intelligence by collecting dispersed information.
  • The authors propose the use of high-frequency "big" data to "nowcast" the indicator to the most recent time period, overcoming the important lags in the collection of trade policy information.

Statistics:

  • Trade policy activity remained relatively flat for over a decade (2010-2019) with an average annual value of approximately 0.05 (normalized relative to the January 2010-December 2011 reference period).
  • Trade policy activity increased from around 2019-2020 onwards, with an average annual value of approximately 0.15 (normalized relative to the January 2010-December 2011 reference period) in 2020.
  • The TPA index has shown a clear spike in trade-facilitating measures following the implementation of the WTO's Trade Facilitation Agreement in 2017, with a corresponding increase in the index value from around 0.10 to 0.30 (normalized relative to the January 2010-December 2011 reference period).
  • The index has been shown to be responsive to various policy events, including US-China tariffs (2018-2019), the onset of the COVID-19 pandemic (2020), the war in Ukraine (2022), and the recent imposition of tariffs.

Sources:

  • Centorrino, Diakantoni, Keck, Ruta, Sztajerowska, and Wei (2025). "A New Trade Policy Activity Index for the WTO-IMF." World Trade Organization and International Monetary Fund.
  • Centorrino, Diakantoni, Keck, Ruta, Sztajerowska, and Wei (2025). "The Trade Policy Activity Index: Preliminary Results." World Trade Organization and International Monetary Fund.