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GTAP Resource #4803

"The time is right: an analysis of timing in bilateral agreements implementation"
by Antimiani, Alessandro and Luca Salvatici

Given the WTOs negotiations slow progress country’s trade policies have been developed with a growing interest in regional and bilateral agreements. Larger countries, such as China, USA and EU, have started a “trade policy risiko”.
Typically, modelers evaluate costs and benefits of an agreement comparing a counterfactual scenarios, which include the trade policy, against a “business-as-usual” (BAU) baseline. A lot of emphasis is (obviously) put on the modelling of the agreement provision while scarce attention is given to the assumptions made about what is expected to happen if the agreement does not materialize. However, the same agreement could have very different impacts according to the environment where it takes place: postponing the implementation of the agreement could lead to larger benefits for one or both partners, and this implies a (sort of) ‘option value, but it could lead to lower benefits and this ‘cost of waiting’ could also significantly reduce the incentive to sign the agreement for one or both partners.
In this paper, we assess the implications of different possible timing for the the Transatlantic Trade and Investment Partnership (TTIP) agreement between the EU and the USA. While EU is negotiating the TTIP, USA is negotiating a bilateral “Pacific” trade agreement, i.e. the Trans-Pacific Partnership (TPP): what difference would it make if an agreement about the TPP is reached before the TTIP?
The analysis will be carried out using the dynamic version of GTAP model, using the GTAP 8.1 database version, which refers to 2007. The baseline will be updated to 2015 both by shocking the macro variables as well as introducing all the EU trade agreement already signed. Then, we will introduce into the baseline the full implementation of the Everything But Arms Regulation, the Economic Partnership Agreements, the FTAs with EUROMED, Korea, Chile, Central America, Colombia, Peru, Mexico, South Africa and the ASEAN plus the unilateral free access to Ph...

Resource Details (Export Citation) GTAP Keywords
Category: 2015 Conference Paper
Status: Published
By/In: Presented at the 18th Annual Conference on Global Economic Analysis, Melbourne, Australia
Date: 2015
Created: Salvatici, L. (4/16/2015)
Updated: Batta, G. (5/6/2015)
Visits: 775
- Dynamic modeling
- Non-Tariff barriers
- Preferential trading arrangements
- Asia (Southeast)
- European Union
- North America

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