Deep Trade Policy Options for Armenia: The Importance of Services, Trade Facilitation and Standards Liberalization

Jesper Jensen and David Tarr

No 332083, Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project

Abstract: In this paper we develop an innovative 21 sector computable general equilibrium model of Armenia to assess the impact on Armenia of a Deep and Comprehensive Free Trade Agreement (DCFTA) with the EU, as well as further regional or multilateral trade policy commitments. We find that a DCFTA with the EU will likely result in substantial gains to Armenia, but we show that the gains derive from the deep aspects of the agreement. In order of importance, the sources of the gains are: (i) trade facilitation and reduction in border costs; (ii) services liberalization; and (iii) standards harmonization. A shallow agreement with the EU that focuses only on preferential tariff liberalization in goods will likely lead to small losses to Armenia primarily due to a loss of productivity from lost varieties of technologies from the Rest of the World region in manufactured products. Additional gains can be expected in the long run from an improvement in the investment climate. We estimate only small gains from a services agreement with the CIS countries, but significant gains from expanding services liberalization multilaterally.

Keywords: International Relations/Trade; Agricultural and Food Policy (search for similar items in EconPapers)
Pages: 70
Date: 2011
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Persistent link: https://EconPapers.repec.org/RePEc:ags:pugtwp:332083

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