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Can we put a price on extending the scope of the GPA? First quantitative assessment

Zornitsa Kutlina-Dimitrova

No 2017-1, DG TRADE Chief Economist Notes from Directorate General for Trade, European Commission

Abstract: The aim of this paper is to analyse the impact of domestic preferences elimination in government procurement agreement (GPA) parties. For this purpose, in a first attempt, I use the newly created public procurement database and modelling extension of the Global Trade Analysis Project (GTAP) model. The shock design of the modelling scenarios is based on insights from empirical literature and is calculated as a difference between private and government sector import penetration. Depending on the scenario, the GPA parties’ GDP increases between $4-5 billion. Implications with regard to economic welfare, however, are more important, the equivalent variation measure points to welfare gains in the range of $8-10 billion. The current research, being the first modelling application paper of the newly created database, and model suggest that further expansion of the scope and coverage of the GPA can bring sizeable economic benefits.

Keywords: Economic modelling; Government Procurement Agreement; International trade (search for similar items in EconPapers)
JEL-codes: C68 D57 F13 F62 (search for similar items in EconPapers)
Date: 2017-03-31
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