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GTAP Resource #5771

"Detailed Representation of the Agricultural Sector in a Partial-General Equilibrium Trade Modelling Framework"
by Chepeliev, Maksym, Alla Golub, Thomas Hertel and Wajiha Saeed

Traditional computable general equilibrium (CGE) models provide valuable insights into economy-wide and aggregate sectoral impacts of changes in trade policies. However, when it comes to the assessment of specific interventions, the level of aggregation in these models leads to a variety of problems. One is that very often trade policies are implemented at tariff lines. Another problem is that variations in tariff rates across different tariff lines for many commodities, along with differences in tariff-rate quotas, are huge. These differences are averaged out within an aggregated sector. Finally, sectoral analysis in CGE models may result in ‘false competition’.
We present results from a PE-GE model used to analyze trade policies in two GTAP sectors: “Vegetables, fruit, nuts” and “Dairy products”. We extend the PE-GE modelling and data processing approach developed in Narayanan et al. (2010) and generalized in Aguiar et al. (2019). In the model, each sector produces multiple commodities. These commodities are consumed domestically and traded internationally, allowing for trade policies to operate differentially across tariff lines. Domestic absorption of these goods is modeled in a two-stage process, with individual commodities first substituting for one another at the tariff line level. They then enter the aggregate GTAP consumption category. The data base with information on bilateral imports, protection rates, domestic production and demand at the detailed commodity level is constructed using Food and Agricultural Organization (FAO) statistical data and MACMAP dataset. Using this framework, we analyze impacts of U.S.-China trade frictions and retaliatory import tariffs on U.S. vegetables, fruit and nuts sectors.

Keywords: agricultural exports; trade retaliation; US-China trade war; vegetables, fruits and nuts; computable general equilibrium.

Resource Details (Export Citation) GTAP Keywords
Category: 2019 Conference Paper
Status: Published
By/In: Presented at the 22nd Annual Conference on Global Economic Analysis, Warsaw, Poland
Date: 2019
Created: Golub, A. (4/13/2019)
Updated: Golub, A. (1/3/2020)
Visits: 2,838
- Agricultural policies
- The GTAP Data Base and extensions
- North America

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