Potential Economic Effects of the Reduction in Agricultural and Nonagricultural Trade Barriers in the Transatlantic Trade and Investment Partnership

Cororaton Caesar and David Orden

MPRA Paper from University Library of Munich, Germany

Abstract: The objective of the paper is to provide a preliminary assessment of the potential economic effects in the U.S. and EU28 of a reduction in their bilateral trade barriers. Using a global CGE model the paper develops four trade barrier reduction scenarios and analyzed their impact on trade, production, factor prices, and welfare in the two economies for a 10-year period through 2024 compared to a baseline without reductions. The scenarios are: (i) 90% reduction in tariffs only; (ii) 90% and 20% reductions in tariffs and NTMs, respectively, for all sectors; (iii) 90% and 20% reductions in tariffs and NTMs in non-agriculture only; and (iv) 90% reduction in both tariffs and NTMs. Results indicate largest percentage increases in bilateral trade for agriculture/food sectors when liberalization includes these sectors, but that most of the gains are in non-agriculture due to its predominance in production and initial trade flows. Only the fourth scenario reverses the baseline downward trend through 2024 in U.S.-EU28 bilateral trade as a share of their global totals.

Keywords: Transatlantic Trade and Investment Partnership (TTIP); Regional trade; United States; European Union 28; Global computable general equilibrium (CGE) model; Tariffs; Non-tariff measures (NTM) (search for similar items in EconPapers)
JEL-codes: C68 D58 F15 (search for similar items in EconPapers)
Date: 2016-04-10, Revised 2016-10-27
New Economics Papers: this item is included in nep-agr, nep-cmp and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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