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Welfare Gains to UK from a Global Free Trade

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  • Bhattarai K.

Abstract

This paper reports on a 11 region 15 sector global trade model which includes the UK as one of the regions. Model results show that a global elimination of tariffs, export taxes and subsidies raises the volume of global trade. Gains from the global free trade are 1.3 percent of the global GDP, roughly about 325 billion dollars in 1995. In absolute terms Japan gains the most (91 billion dollars) followed by Europe (67 billion dollars) and the USA (54 billion dollars). UK gains about 11 billion dollars (6.8 billion pounds) from multilateral trade liberalisation. These gains are significantly higher than gains reported from unilateral liberalisation obtained from a small open economy model. Gains from free trade as a share of GDP are much higher for emerging countries such as China than for other regions in the model.

Suggested Citation

  • Bhattarai K., 2001. "Welfare Gains to UK from a Global Free Trade," European Research Studies Journal, European Research Studies Journal, vol. 0(3-4), pages 55-72, July - De.
  • Handle: RePEc:ers:journl:v:iv:y:2001:i:3-4:p:55-72
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    File URL: http://www.ersj.eu/repec/ers/papers/01_34_p5.pdf
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    References listed on IDEAS

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    1. Diao, Xinshen & Somwaru, Agapi, 2000. "An Inquiry on General Equilibrium Effects of MERCOSUR--An Intertemporal World Model," Journal of Policy Modeling, Elsevier, vol. 22(5), pages 557-588, September.
    2. Goulder, Lawrence H. & Summers, Lawrence H., 1989. "Tax policy, asset prices, and growth : A general equilibrium analysis," Journal of Public Economics, Elsevier, vol. 38(3), pages 265-296, April.
    3. Keshab Bhattarai & John Whalley, 2006. "The Division and Size of Gains from Liberalization in Service Networks," Review of International Economics, Wiley Blackwell, vol. 14(3), pages 348-361, August.
    4. Glenn W. Harrison & Thomas F. Rutherford & David G. Tarr, 2017. "Quantifying The Uruguay Round," World Scientific Book Chapters,in: Trade Policies for Development and Transition, chapter 16, pages 363-388 World Scientific Publishing Co. Pte. Ltd..
    5. Madanmohan Ghosh & Carlo Perroni & John Whalley, 1998. "The Value of MFN Treatment," NBER Working Papers 6461, National Bureau of Economic Research, Inc.
    6. Keshab Bhattarai, 2003. "Efficiency and factor reallocation effects and marginal excess burden of taxes in the UK economy," European Research Studies Journal, European Research Studies Journal, vol. 0(3-4), pages 177-206, July - De.
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Recovery needs more demand not free trade
      by Brian Ashcroft in Scottish Economy Watch on 2012-12-12 01:07:01

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    Cited by:

    1. Keshab Bhattarai, 2007. "Input–Output and General Equilibrium Models for Hull and Humber Region in England," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 35(4), pages 473-490, December.
    2. Keshab Raj BHATTARAI, "undated". "Dynamic Multi-Household General Economic Models for Policy Simulations: France, Germany, Spain and UK," EcoMod2009 21500014, EcoMod.

    More about this item

    Keywords

    Global trade model; UK economy;

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • F40 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - General

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