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The blind spots of trade impact assessment: macroeconomic adjustment costs and the social costs of regulatory change

Author

Listed:
  • Werner Raza

    (Austrian Foundation for Development Research, Vienna, Austria)

  • Bernhard Tröster

    (Austrian Foundation for Development Research, Vienna, Austria)

  • Rudi von Arnim

    (Department of Economics, University of Utah, Salt Lake City, UT, USA)

Abstract

Economic studies on trade liberalization typically highlight positive expected effects. This paper discusses those issues which are frequently neglected, but are nevertheless important for policy-makers. These are macroeconomic adjustment costs and social costs of regulatory change. Our discussion uses the most relevant studies on the economic effects of the Transatlantic Trade and Investment Partnership (TTIP) as reference points. We provide a rough estimate of macroeconomic adjustment costs of TTIP in the order of €33–60 billion over a 10-year transition period. Our analysis of regulatory change concludes that assessments have been biased and that the social costs of regulatory change due to TTIP might be substantial. Given the prominence of regulatory issues on the trade agenda, we call for full ex-ante regulatory impact assessment of future trade agreements.

Suggested Citation

  • Werner Raza & Bernhard Tröster & Rudi von Arnim, 2016. "The blind spots of trade impact assessment: macroeconomic adjustment costs and the social costs of regulatory change," European Journal of Economics and Economic Policies: Intervention, Edward Elgar Publishing, vol. 13(1), pages 87-102, April.
    • Handle: RePEc:elg:ejeepi:v:13:y:2016:i:1:p87-102
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    Cited by:

    1. Raza, Werner G. & Tröster, Bernhard & von Arnim, Rudi, 2016. "ASSESS_CETA: Assessing the claimed benefits of the EU-Canada Trade Agreement (CETA) [CETA: Ökonomische Bewertung der prognostizierten Effekte des EU-Kanada-Freihandelsabkommens]," Research Reports 4/2016, Austrian Foundation for Development Research (ÖFSE).

    More about this item

    Keywords

    trade policy; trade impact assessment; non-tariff measures; macroeconomic adjustment costs; social costs;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation

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