A General Equilibrium Assessment of the Economic Impact of Deep Trade Agreements
This paper explores the economic impacts of preferential trade agreements, focusing on the provisions they contain, beyond phasing out tariffs. Clustering 278 preferential trade agreements based on 906 provisions grouped into 18 policy areas, three...
Main Authors: | , , , |
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Language: | English |
Published: |
World Bank, Washington, DC
2021
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Subjects: | |
Online Access: | http://documents.worldbank.org/curated/en/361861618415615671/A-General-Equilibrium-Assessment-of-the-Economic-Impact-of-Deep-Trade-Agreements http://hdl.handle.net/10986/35452 |
Summary: | This paper explores the economic impacts
of preferential trade agreements, focusing on the provisions
they contain, beyond phasing out tariffs. Clustering 278
preferential trade agreements based on 906 provisions
grouped into 18 policy areas, three clusters are obtained
for which a trade elasticity to preferential trade agreement
is estimated using structural gravity. A series of full
general equilibrium counterfactual situations for endowment
economies is simulated, revealing the economic impacts of
deepening existing trade agreements and signing new
ones—that is, the intensive and extensive margins of
preferential trade agreements. The paper illustrates the
method with a general deepening of existing preferential
trade agreements worldwide. Focusing on the examples of the
Latin America and the Caribbean and East Asia and Pacific
regions, the paper shows that deepening preferential trade
agreements leads to higher trade and welfare effects than
signing new ones. |
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