Re-Evaluation of Free Trade Agreement: Based on Regional Value Contents in Agricultural, Fishery and Livestock products

Byeong-ho Lim

No 333476, Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project

Abstract: The purpose of this study is to evaluate the economic effects of FTAs using the concept of value-added exports. So far, the economic effects of FTAs have been dependent on decrease in import prices due to tariff cuts in importing countries, but the actual tariff reduction need to consider the value added of the exporting countries. Value-added export refers to the value created in the exporting country out of total exports. Among value-added exports, direct value-added export is interpreted as the Regional Value Contents (RVC), from which the economic effect of the FTA can be analyzed. A modified GTAP-VA model takes into account RVC in order to fix overestimation problem. By the re-evaluation of the FTA based on the RVC, this paper makes it clear that the economic effects of the existing FTA methodology have the possibility of overestimation.

Keywords: International Relations/Trade; Public Economics (search for similar items in EconPapers)
Pages: 17
Date: 2022
New Economics Papers: this item is included in nep-int
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Persistent link: https://EconPapers.repec.org/RePEc:ags:pugtwp:333476

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