The World Trade Organization (WTO) and the International Monetary Fund (IMF) developed the Trade Policy Activity (TPA) Index , a tool to measure the evolution of trade policies worldwide .
The new indicator, developed by economists from both organizations and based on a Dynamic Factors Model, draws on data from the WTO’s Trade Tracking Database (TMDB) and the Global Trade Alert (GTA), allowing for a timely and comprehensive capture of the dynamics of trade measures adopted by multiple economies and sectors .
According to the researchers, the index revealed a marked upturn in business activity between 2019 and 2020, coinciding with events such as the COVID-19 pandemic, tensions between major powers, and rising geopolitical risks .
This structural shift reflects a broader use of trade policy to achieve goals such as environmental sustainability, national security, and industrial development. Furthermore, the CPA identifies cyclical patterns and temporary spikes , such as the US-China tariffs, the war in Ukraine, and recent new protectionist measures.
The index also distinguishes between different types of measures, such as trade facilitation versus other interventions. Since the implementation of the Trade Facilitation Agreement in 2017 , there has been a sustained increase in these types of measures, especially during crises such as the pandemic and the conflict in Ukraine, when countries sought to ease restrictions on essential goods, they detailed.
Beyond retrospective analysis, the APC has the potential to become an early warning tool for policymakers .
The study’s authors propose incorporating high-frequency macro data to improve the index’s predictive capacity and reduce data collection gaps.
“With further testing and expansion by the authors, the TPA index could become a valuable tool for monitoring global trade policies and could be updated by WTO and IMF economists to promote greater transparency and dialogue,” the organizations stated.
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