Modelling welfare effects under Pakistan–China free trade agreement

2018 ◽  
Vol 11 (3) ◽  
pp. 202-218 ◽  
Author(s):  
Lubna Uzair ◽  
Ahmad Nawaz
Keyword(s):  
Trade Policy ◽  
Free Trade ◽  
Free Trade Agreement ◽  
Academic Research ◽  
Trade Agreement ◽  
Policy Formulation ◽  
Trade Creation ◽  
Content Type ◽  
The World ◽  
The Impact

PurposeThis paper aims to empirically examine the trade creation and diversion impacts on merchandise imports of Pakistan under the Pakistan–China Free Trade Agreement (FTA). The analysis of Pakistan’s preferential treatment with its largest trade partner as well as the most substantial exporter of the world will help to shape trade policy, open windows for academic research and also gives an immense contribution in literature.Design/methodology/approachA disaggregated panel data on the imports of Pakistan from China and other WTO member countries and tariff concessions at Harmonized System (HS) two-digit level used for the agreement period of 2006-2012. The empirical analysis takes care of bias through robust and panel-corrected standard errors with time, industry-specific effects and controlling for multilateral trade resistance.FindingsEvidence found in support of trade creation under the Pakistan–China FTA. It means overall this agreement increased the welfare of Pakistani consumers.Practical implicationsFindings are in favour of negotiations and signing for the next round of this agreement and with other major trade partners like the US and Saudi Arabia.Originality/valueIt is worth investigating empirically the impact of preferential trade liberalization between Pakistan – a developing country – and China – the largest importer of the world – explicitly, in the form of trade creation or diversion. The empirical assessment of this FTA signed with the world’s largest exporter will not only contribute immensely to the literature but also help in trade policy formulation and open windows for academic research. Another unique aspect of this study is the use of disaggregated data consisting of all goods imports along with tariff concessions at two-digit Harmonized System (HS) code.

Assessment of the Proposed India-China Free Trade Agreement: A General Equilibrium Approach

2015 ◽  
Vol 8 (2) ◽  
pp. 81-108 ◽  
Author(s):  
Rahul Arora ◽  
Sarbjit Singh ◽  
Somesh K. Mathur
Keyword(s):  
General Equilibrium ◽  
Free Trade ◽  
World Trade ◽  
Free Trade Agreement ◽  
Trade Agreement ◽  
Tariff Reduction ◽  
Trade Association ◽  
Content Type ◽  
The World ◽  
The Impact

Purpose The present study is an attempt to evaluate the impact of the proposed India-China free trade agreement (FTA) in goods trade on both countries under a static general equilibrium framework. Design/Methodology/Approach The study has utilized the Global Trade Analysis Project (GTAP) model of world trade with the presence of skilled and unskilled unemployment in the world. For analysis purposes, 57 GTAP sectors, representing the whole regional economy, have been aggregated into 43 sectors and 140 GTAP regions, representing the whole world, have been aggregated into 19 regions. The study has also used the updated tariff rates provided by the World Trade Organization for better results. Findings The preliminary analysis using trade indicators depicted that by utilizing their own comparative advantage, both of the countries can maximize their gains by exporting more to the world. The simulation results from the GTAP analysis revealed that a tariff reduction in all goods trade would be more beneficial for both the countries than the tariff reduction in each other's specialized products. All other regions lose in terms of shifting the Indian imports towards China in a post-simulation environment. Regions with a significant loss are: the European Union (28 members), Southeast Asia, the Unites States, Japan, Korea, West Asia, and the European Free Trade Association (EFTA). Originality/Value The disaggregated sector-wise analysis has been performed using the latest available GTAP database, version 9.

Developments in India’s Bilateral Trade with ASEAN: A Study in Manufactured Sectors

2014 ◽  
Vol 1 (1) ◽  
Author(s):  
Mayengbam Lalit Singh
Keyword(s):  
Free Trade ◽  
Equilibrium Model ◽  
Free Trade Agreement ◽  
Bilateral Trade ◽  
Trade Agreement ◽  
Partial Equilibrium ◽  
Trade Creation ◽  
Partial Equilibrium Model ◽  
The Impact ◽  
Model Approach

The present paper deals with the impact of the recently signed ASEAN-India Free Trade Agreement (FTA) on manufactured goods. Partial equilibrium model approach (SMART model) has been employed to find out trade creation and diversion values of those goods in respective markets (India as well as ASEAN). In this paper, a new index has been constructed to embody score of India and two ASEAN groups using values of trade creation and diversion.

Brexit and the EU–UK free trade agreement: dos and don’ts when drafting rules of origin

2019 ◽  
Vol 18 (2) ◽  
pp. 96-107
Author(s):  
Roberto Soprano
Keyword(s):  
Free Trade ◽  
Free Trade Agreement ◽  
Trade Agreement ◽  
Utilization Rate ◽  
The European Union ◽  
Rules Of Origin ◽  
Content Type ◽  
Corporate Strategies ◽  
Pros And Cons ◽  
The Impact

Purpose The purpose of this paper is to highlight the pros and cons of different models of the European Union (EU)-style Rules of Origin (RoO) that could be chosen by negotiators for a future UK–EU Free Trade Agreement (FTA). It will also underline the impact that any choice would have on economic operators and certain criteria that should be evaluated before taking any decisions on the adoption of RoO. Design/methodology/approach The paper will describe three different RoO models that could be chosen by negotiators. For each of them, it analyses the pros and cons and the impact on economic operators. Findings The choice of a RoO would have an impact on future EU–UK trade relations. It will affect the utilization rate of the FTA as well as investment (and divestment) corporate strategies in the UK and EU. Originality/value The paper introduces different criteria to evaluate the impact of RoO that should be taken into consideration by negotiators. It emphasizes that RoO should be simple, predictable, coherent, IT compatible and easily adaptable.

scholarly journals Impact of removing industrial tariffs under the European–Vietnam free trade agreement

2019 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Le Trung Ngoc Phat ◽  
Nguyen Kim Hanh
Keyword(s):  
Social Welfare ◽  
Free Trade ◽  
Free Trade Agreement ◽  
Trade Agreement ◽  
Household Consumption ◽  
Industrial Sector ◽  
Cge Model ◽  
Content Type ◽  
Factors Of Production ◽  
The Impact

Purpose The purpose of this paper is to employ the computable general equilibrium (CGE) approach to examine how the European–Vietnam Free Trade Agreement (EVFTA) impacts on the Vietnamese economy in the case of the removal of industrial tariffs. Design/methodology/approach The authors construct a social accounting matrix based on the latest data of the Vietnam input-output Table for the year 2012 and then apply the CGE model to simulate the economic scenarios when the tariff rate of the industrial sector reduces to 0 percent. Findings The first simulation results demonstrate that the elimination of tariffs in the industrial sector will lead to a 9.13 percent increase in household consumption, together with an increase in the factors of production of the agricultural, industrial and service sectors by 9.61, 9.74 and 8.21 percent, respectively. The EVFTA also causes a deficit in the trade balance because the value of imports increases by 12.54 percent, while exports’ value slightly increases by 2.71 percent. Furthermore, there has been a drop of 2.29 percent in the total government income; nevertheless, social welfare witnesses a gain of 9.13 percent. The second scenario simulation draws crucial attention to policymakers that a small fluctuation in the production tax rate will cause a significant change in the economy. Practical implications The reduction of tariff in the industrial sector will increase the social welfare and strengthen the whole economy regarding the growth of household consumption, factors of production and trade value. On the unfavorable side, the EVFTA causes a national budget deficit and puts pressure on domestic production. This paper is a valuable reference for governments and policymakers when they decide to reduce tariffs or adjust production taxes once Vietnam integrates into the world economy. Originality/value This study differs from previous research works by utilizing a static CGE model to investigate the impact of removing the industrial tariff on the economy under EVFTA.

scholarly journals Revenue, welfare and trade effects of European Union Free Trade Agreement on South Africa

2017 ◽  
Vol 20 (1) ◽  
Author(s):  
Kore M.A. Guei ◽  
Gift Mugano ◽  
Pierre Le Roux
Keyword(s):  
South Africa ◽  
European Union ◽  
Simulation Model ◽  
Free Trade ◽  
Free Trade Agreement ◽  
Trade Agreement ◽  
Trade Creation ◽  
The European Union ◽  
Total Trade ◽  
The Impact

Background: Using the partial equilibrium WITS-SMART Simulation model to assess the impact of liberalisation under the Trade Development and Cooperation Agreement (TDCA) of a free trade area between the European Union and South Africa. The identification of the impact of such agreement allows for trade policy negotiation adjustment that can be beneficial for South Africa.Aim: The aim of the study is to estimate and discuss the impact of a Free Trade Agreement (FTA) with the European Union and South Africa. More specifically, the study intends to estimate the impact of revenue, welfare, imports, exports, trade creation and to come up with policies options for South Africa that can be used in negotiations and policy formulations.Setting: The study used international trade data (2012) available in the WITS-SMART model to assess bilateral trade agreement between the European Union and South Africa.Methods: To identify the impact on revenue, welfare, imports, exports and trade creation, the study simulated an FTA (0% tariff rate) for all goods exchanged between the European Union and South Africa. Also, the elasticity of substitution used for the simulation model was 99%.Results: The findings of the study reveal that total trade effects in South Africa are likely to surge by US$ 1.036 billion with a total welfare valued at US$ 134 million. Dismantling tariffs on all European Union (EU) goods would be beneficial to consumers through net trade creation. Total trade creation would be US$ 782 million. However, South African producers are likely to contribute a trade diversion of US$ 254 million which has a negative impact on consumer welfare. The country might also experience a revenue loss amounting to US$ 562 million because of the removal of tariffs. In trade, the country’s exports and imports to the EU are expected to increase by US$ 12.419 million and US$ 1.266 million, respectively.Conclusion: The European Union–South Africa FTA would result in both trade creation and trade expansion effects. However, trade creation and revenue loss are potential threats. In order to mitigate revenue loss, government needs to consider alternative tax such as consumption tax on certain goods and value-added tax.

Liberalization and tariff dismantling

2016 ◽  
Vol 118 (2) ◽  
pp. 250-271
Author(s):  
Fernando González Laxe ◽  
Federico Martín Palmero ◽  
Domingo Calvo Dopico
Keyword(s):  
Free Trade ◽  
Value Chain ◽  
Free Trade Agreement ◽  
Trade Agreement ◽  
Trade Liberalisation ◽  
The European Union ◽  
Production Sector ◽  
Content Type ◽  
Mussel Farming ◽  
The Impact

Purpose – The purpose of this paper is to assess the impact that the free trade agreement between the European Union (EU) and Chile and its resulting dismantling of tariffs has had on the mussel cultivation industry, particularly in Galicia. Specifically, the authors examine how trade liberalisation has affected the mussel farming industry. Design/methodology/approach – The authors aim to observe the general panorama of both the evolution of production, distinguishing between fresh and industrial usage, and the evolution of prices at source depending on destination (fresh or industrial in the period 2003-2012). In order to analyse the relationships between different agents of the value chain, Porter’s model has been used as a reference. Findings – There is a loss of competitiveness in the mussel farming-production sector following the liberalisation agreement of 2006 and huge bargaining power of the processing sector vs the production sector. Practical implications – There is an opportunity to implement traceability programmes and develop a more differentiated product. In addition, it is profitable to promote Galician mussels through generic advertising and promoting exports. Originality/value – There is a lack of empirical studies about the impact that the new free trade agreement between the EU and Chile has had on the Spanish mussel industry. Particularly, the study analyses economic repercussions, managerial implications and new challenges stemming from the new context of trade liberalisation.

scholarly journals Effect of NAFTA, EUMFTA and China addition to WTO on the cucumber world market

2017 ◽  
Vol 7 (14) ◽  
Author(s):  
Ramón Guajardo-Quiroga
Keyword(s):  
Free Trade ◽  
World Trade ◽  
Free Trade Agreement ◽  
Trade Agreement ◽  
World Market ◽  
Spatial Equilibrium ◽  
Spatial Equilibrium Model ◽  
The World ◽  
The Impact ◽  
Complete Operation

Key words: Cucumber world market, international trade, economic integration, quadratic programming, spatial equilibrium models.Abstract. This study empirically analyzed the potential effects of the complete operation of North American Free Trade Agreement (NAFTA), European Union and Mexico Free Trade Agreement (EUMFTA), and the integration of China to the World Trade Organization (WTO), on the cucumber world market. Special emphasis on the impact on Mexico was presented, from a worldwide perspective. A spatial equilibrium model with endogenous prices was constructed for this purpose. Among the findings are: (1) Mexican producers benefited from the complete implementation of NAFTA and EUMFTA. (2) The incorporation of China as a member of the WTO showed a negligible effect on the commercial flows and prices in the cucumber world market. (3) Mexican cucumber production is highly competitive, in the world market, because it has the lowest supply costs.Palabras Clave: Mercado mundial del pepino, integración económica, comercio internacional, programación cuadrática, modelos de equilibro espacial.Resumen. Este estudio analiza empíricamente los efectos potenciales de la operación completa del Tratado de Libre Comercio de América del Norte (TLCAN), Tratado de Libre Comercio de la Unión Europea y México (UMFTA), y la integración de China a la Organización Mundial de Comercio (OMC) en relación al mercado mundial del pepino. Se presentan, con énfasis especial, los impactos sobre México desde una perspectiva mundial.

Assessing the Impact of the Australia-United States Free Trade Agreement (AUSFTA) on Australian and Global Medicines Policy

2005 ◽  
Author(s):  
Thomas Alured Faunce ◽  
Evan Doran ◽  
David Henry ◽  
Peter Drahos ◽  
Andrew Searles ◽  
...  
Keyword(s):  
United States ◽  
Free Trade ◽  
Free Trade Agreement ◽  
Trade Agreement ◽  
The Impact

The Investment Provisions of the Canada—United States Free Trade Agreement: A Canadian Perspective

1990 ◽  
Vol 84 (2) ◽  
pp. 394-443 ◽  
Author(s):  
Jean Raby
Keyword(s):  
United States ◽  
Free Trade ◽  
Free Trade Agreement ◽  
Bilateral Trade ◽  
Good Deal ◽  
Trade Agreement ◽  
Ronald Reagan ◽  
The United States ◽  
The World ◽  
Trading Partners

This is a good deal, a good deal for Canada and a deal that is good for all Canadians. It is also a fair deal, which means that it brings benefits and progress to our partner, the United States of America. When both countries prosper, our democracies are strengthened and leadership has been provided to our trading partners around the world. I think this initiative represents enlightened leadership to the trading partners about what can be accomplished when we determine that we are going to strike down protectionism, move toward liberalized trade, and generate new prosperity for all our people.On January 2, 1988, President Ronald Reagan of the United States and Prime Minister Brian Mulroney of Canada signed the landmark comprehensive Free Trade Agreement (FTA) between the two countries that already enjoyed the largest bilateral trade relationship in the world. The FTA was subsequently ratified by the legislatures of both countries, if only after a bitterly fought election on the subject in Canada. On January 1, 1989, the FTA formally came into effect.

scholarly journals INDONESIA'S POSITION BASED ON THE AUSTRALIAN ASEAN NEW ZEALAND FREE TRADE AGREEMENT AND ITS IMPACT FROM A BUSINESS LAW PERSPECTIVE

2010 ◽  
Vol 40 (1) ◽  
pp. 142
Author(s):  
Ariawan Gunadi
Keyword(s):  
New Zealand ◽  
Free Trade ◽  
Free Trade Agreement ◽  
Trade Agreement ◽  
South East Asia ◽  
Business Law ◽  
Business Partner ◽  
The West ◽  
Brunei Darussalam ◽  
The World

AbstractIndonesia as one of the major countries in South East Asia acts as aprominent business center between the East and the West. Business activitiessoon attract the attention of other countries in similar geography to share thewealth such as Malaysia, Filipina, Myanmar, Cambodia, Singapore,Vietnam, Thai/and, Laos, Myanmar and Brunei Darussalam. However, theinternational society would have to face the import taxes that impedesf oreign goods from flowing into state member' market. Australia and NewZealand as a fellow business partner then proposes the Australian AseanNew Zealand Free Trade Agreement (AANZFTA) to the Association of SouthEast Asian Nations (ASEAN) that allows members to conduct free tradeamong them in almost every sector, including goods, services, investment,intellectual property and new issues (Singapore Issues). However theagreement is suspected by some parties to condone a subtle form of liberaleconomy that may allow Australia and New Zealand to influence the nationaleconomy of the weaker state, not mentioning endangering ASEAN'bargaining position in the World Trade Organization. This article attemptsto explain the position of Indonesia 's economic sovereignty by signing theAANZFTA which imposes several clauses affecting the economic activity andhow will the agreement bring impact to Indonesia 's national economy offrom a business law perspective.

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