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GTAP Resource #6063

"Properly Capturing Trade Liberalization: Impacts of CETA"
by Jafari, Yaghoob, Wolfgang Britz, Houssein Guimbard and Jayson Beckman

Computable general equilibrium models are often used to conduct trade policy analysis; but given the complexity in data collection and modelling, they often simplify tariff rate quotas (TRQs). However, TRQs are very important in trade negotiations since they are rarely completely liberalized, and are often the sticking point in negotiations. This paper compares approaches to representing TRQs in CGE models from a methodological and aggregation perspective, considering their representation (explicit or implicit) at the tariff line or sector level. Using the Canada-EU trade agreement as an example, we find significant aggregation bias if TRQ shocks are implemented at the aggregate sectoral level. This bias is only partially removed if TRQs are implicitly represented by ad-valorem equivalents at the tariff line. This suggests the need to represent TRQs explicitly at the relevant commodity detail in trade impact assessments.

Resource Details (Export Citation) GTAP Keywords
Category: 2020 Conference Paper
Status: Published
By/In: Presented during the 23rd Annual Conference on Global Economic Analysis (Virtual Conference)
Date: 2020
Created: Jafari, Y. (4/15/2020)
Updated: Jafari, Y. (3/8/2021)
Visits: 2,027
- Baseline development
- Agricultural policies
- Non-Tariff barriers
- European Union
- North America

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