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World Tariff Liberalization in Agriculture: An Assessment Following a Global CGE Trade Model for EU15 Regions

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Author Info

  • Gabriele Standardi

    (Fondazione Eni Enrico Mattei)

  • Federico Perali

    (University of Verona, Department of Economic Sciences)

  • Luca Pieroni

    (University of Perugia, Department of Economics, Finance and Statistics)

Abstract

This paper aims at modeling a global CGE trade model for the EU15 subnational regions. This model is used to assess production reallocation across sectors in each EU15 region, assuming a scenario in which world tariff liberalization is implemented in the agricultural sector. The model is parsimonious in terms of data, focusing on unskilled and skilled labor as the source of heterogeneity across regions. A stylized model is built to interpret trade policy effects. Results show decreases in agricultural production in the EU15 of about 0.93%. All regions reduce agriculture but show different magnitudes in the relative changes of production. Large reallocation effects are observed between manufactures and services, some regions specializing in the former and others in the latter. In addition, the introduction of labor mobility within the EU15 and the EU27 causes strong amplification effects in manufactures and services.

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Bibliographic Info

Paper provided by Fondazione Eni Enrico Mattei in its series Working Papers with number 2014.25.

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Date of creation: Mar 2014
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Handle: RePEc:fem:femwpa:2014.25

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Keywords: CGE modeling; International trade; Agriculture;

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  1. Antoine Bouët & Jean-Christophe Bureau & Yvan Decreux & Sébastien Jean, 2005. "Multilateral agricultural trade liberalisation : the contrasting fortunes of developing countries in the Doha round," Working Papers 156783, Institut National de la Recherche Agronomique, France.
  2. Adams, Philip D., 2005. "Interpretation of results from CGE models such as GTAP," Journal of Policy Modeling, Elsevier, vol. 27(8), pages 941-959, November.
  3. Giovanni Anania & Jean-Christophe Bureau, 2005. "The negotiations on agriculture in the Doha development agenda round : current status and future prospects," Working Papers 156781, Institut National de la Recherche Agronomique, France.
  4. Yvan Decreux & Hugo Valin, 2007. "MIRAGE, Updated Version of the Model for Trade Policy Analysis: Focus on Agriculture and Dynamics," Working Papers 2007-15, CEPII research center.
  5. John Duffy & Chris Papageorgiou & Fidel Perez-Sebastian, 2004. "Capital-Skill Complementarity? Evidence from a Panel of Countries," The Review of Economics and Statistics, MIT Press, vol. 86(1), pages 327-344, February.
  6. Matthew W. Peter & Mark Horridge & G.A.Meagher & Fazana Naqvi & B.R.Parmenter, 1996. "The Theoretical Structure of MONASH-MRF," Centre of Policy Studies/IMPACT Centre Working Papers op-85, Victoria University, Centre of Policy Studies/IMPACT Centre.
  7. Sébastien Jean & David Laborde, 2004. "The Impact of Multilateral Liberalisation on European Regions: a CGE Assessment," Working Papers 2004-20, CEPII research center.
  8. Horridge, Mark & Madden, John & Wittwer, Glyn, 2005. "The impact of the 2002-2003 drought on Australia," Journal of Policy Modeling, Elsevier, vol. 27(3), pages 285-308, April.
  9. Antoine Bouët & Yvan Decreux & Lionel Fontagné & Sébastien Jean & David Laborde, 2004. "A Consistent, Ad-Valorem Equivalent Measure of Applied Protection Across the World: The MAcMap-HS6 Database," Working Papers 2004-22, CEPII research center.
  10. Yang, Jun & Huang, Jikun & Li, Ninghui & Rozelle, Scott & Martin, Will, 2011. "The impact of the Doha trade proposals on farmers' incomes in China," Journal of Policy Modeling, Elsevier, vol. 33(3), pages 439-452, May.
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