Physics, Business, Law - An Interdisciplinary Project

MLB Graduate Winfried Reimann and Professor Dr. Natalia Ribberink publish an innovative paper on the topic of trade agreements

About the Authors

Winfried Reimann graduated in 2021 from the MLB Program at Bucerius Law School. Prior to that, he studied physics and worked for several years in a management consultancy firm. During the Master’s Program, Mr. Reimann took the course “International Trade and Investment” with Professor Dr. Natalia Ribberink, who subsequently supervised his master's thesis. Since graduating, Mr. Reimann, has been working in the Federal Ministry of Finance in Berlin, where he is involved with the state-supported stabilization of companies that have experienced difficulties as a result of the corona crisis or the current energy crisis.

Since 2012 Professor Ribberink has been teaching Foreign Trade and International Management at the University of Applied Sciences in Hamburg and since 2014, she has been part of the MLB faculty, teaching the course "International Trade and Investment". Her supervision of Mr. Reimann's master's thesis and the results achieved led them to work on a joint paper.


What is the topic about?

The central topic of the course was, amongst other things, international free trade agreements of various designs. For example, while some agreements only lower tariffs, others go further and cover areas such as the harmonization of regulatory standards, the protection of investments or the strengthening of workers' rights.

The idea to then carry out an analysis on the topic "Heterogeneity in Preferential Trade Agreements: Legal Provisions and their Impact on International Trade" arose during the group work and discussions in the course. Various trade blocs were discussed and analyzed using international trade data. As a result, Mr. Reimann suggested further investigating the topic as part of his master's thesis. There he questioned how the various elements of an agreement mentioned above affect trade activities between member states and ultimately strengthen trade.

During the analysis, Reimann and Ribberink came to exciting and sometimes surprising results and then explored these more deeply in the context of a joint paper. The authors succeeded in classifying the variety of valid free trade agreements (261 in total) into three clusters and analyzing the respective effects of a cluster-typical agreement on the configuration of trade flows inside and outside the participating member states.

It became clear, that not every trade agreement automatically leads to more trade. A certain "depth" (in this case meaning: a sufficient number of areas in which trade is liberalized and standards are aligned) must be present. Simply lowering tariffs, for example, is often not effective. Looking at the increasingly important trade in services, even greater depth is required to have a discernible effect on trade growth.


International Recognition

Prof. Ribberink has been a member of the Academy of International Business since 2015 and was invited to their Annual Conference 2022 in Miami to present the joint paper. The selection process was very demanding due to the high volume of submitted publications. The invitation from the renowned association was very positive for the two researchers.

Prof. Ribberink's lecture was received with great interest, the question and methodology were praised, and a lively discussion followed on the internationally and very timely research topic. Reimann and Ribberink are currently working on the recommendation to submit their paper for publication in a scientific journal. Perhaps there will be more exciting research projects from them in the future!

What are Preferential Trade Agreements (PTAs)?

In fact, one of the most important rules of the World Trade Organization (WTO) is that the trade advantage that one WTO member grants to another must also be granted to every other WTO member ("most favored nation principle"). In principle, preferential trade is therefore prohibited. However, if a group of countries liberalizes trade among themselves in a comprehensive and transparent manner, these trade advantages need not be extended to other WTO members. This exception is called a “preferential trade agreement”. PTAs and their influence on international trade flows formed the central research question of the analysis.


Why is this topic so important?

Global trade plays a major role in a country's economic development and, at best, contributes to prosperity and growth. In the worst case, however, growing trade activity can have negative effects and lead to precarious working conditions, growing inequality and environmental pollution.

Ideally, there should only be trade deals that have positive consequences and prevent the possible negative effects. In order to be able to actively manage this, one has to understand how the different elements of a trade agreement work. New insights can help to design trade agreements more precisely in the future, so that all countries involved can benefit from increasing globalization.


Emma Schimmel, Florian Helwich