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GTAP Resources: Resource Display

GTAP Resource #4493

"Global value chains and the cost of protection"
by Stone, Susan, Dorothee Flaig and Frank van Tongeren

There are growing concerns about the rise in non-traditional trade restrictions or impediments. Non-tariff measures (NTMs), while applied in varying forms for years, are mounting, and so has their impact on trade flows. In fact, there is evidence that the rise in globalisation, through GVCs and other cross-border interactions, has contributed to both the rise in the use of NTMs as well as to their cost. As intermediate inputs are traded across borders multiple times, downstream firms end up paying higher costs for imported inputs in addition to the barriers on their own exports, amounting to another round of restrictions on those same imported inputs. The effective burden for the exporter can thus be several orders of magnitude over what nominal tariffs or NTMs show (Miroudot and Rouzet, 2013). Consequently, firms are campaigning vigorously for the monitoring and elimination of a variety of NTMs.
Policies and research questions need to change in order to devise responses that adequately address this new trade reality. Likewise, trade models need to incorporate these new trade, production and investment patterns to provide the necessary insights. The possibility to better reflect GVC in CGE models is strongly influenced by the development of new databases, which make it possible to differentiate trade flows by end use. To depict GVCs it is not only necessary to trace bilateral flows of goods and services, i.e. by country of origin and by country of destination, but to distinguish trade flows by type of use, i.e. intermediate input, final consumption and capital goods. The information on use categories allows, for example, the derivation of value added by the origin of intermediate inputs, and thus an improved analysis of the effects of policy measures in a world of GVCs.
Walmsley et al. (2013) and ongoing work at the USITC (e.g. Koopman et al. 2012) both model GVCs based on augmented versions of the GTAP model that include additional modules like export proces...

Resource Details (Export Citation) GTAP Keywords
Category: 2014 Conference Paper
Status: Published
By/In: Presented at the 17th Annual Conference on Global Economic Analysis, Dakar, Senegal
Date: 2014
Created: Stone, S. (4/15/2014)
Updated: Flaig, D. (7/21/2014)
Visits: 1,857
- Baseline development
- Model validation and sensitivity analysis
- Non-Tariff barriers
- The GTAP Data Base and extensions

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