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GTAP Model Analysis of the Economic Effects of an Australia-China FTA: Welfare and Sectoral Aspects

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  • Mahinda Siriwardana
  • Jinmei Yang

Abstract

The Australia-China Free Trade Agreement (ACFTA) is already in the process of being negotiated by the two governments. This paper employs the Computable General Equilibrium (CGE) model using Global Trade Analysis Project (GTAP) database version 6 for a quantitative analysis of the economic effects of proposed ACFTA. Four scenarios are examined in the paper focusing on flexible and fixed current account positions within short run and long run. Equivalent variation (EV) and real consumption are used to measure the welfare effects resulting from the formation of the ACFTA. The results from the GTAP simulations show positive welfare effects for both Australia and China in all cases. Sectoral results show mixed outcomes.

Suggested Citation

  • Mahinda Siriwardana & Jinmei Yang, 2008. "GTAP Model Analysis of the Economic Effects of an Australia-China FTA: Welfare and Sectoral Aspects," Global Economic Review, Taylor & Francis Journals, vol. 37(3), pages 341-362.
    • Handle: RePEc:taf:glecrv:v:37:y:2008:i:3:p:341-362
    DOI: 10.1080/12265080802273315
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    References listed on IDEAS

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    1. Hertel, Thomas, 1997. "Global Trade Analysis: Modeling and applications," GTAP Books, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, number 7685, December.
    2. Yinhua Mai & Philip Adams & Mingtai Fan & Ronglin Li & Zhaoyang Zheng, 2005. "Modelling the Potential Benefits of an Australia-China free Trade Agreement," Centre of Policy Studies/IMPACT Centre Working Papers g-153, Victoria University, Centre of Policy Studies/IMPACT Centre.
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    Cited by:

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    2. Qi, Chaoying & Zhang, James Xiaohe, 2018. "The economic impacts of the China-Australia Free Trade Agreement - A general equilibrium analysis," China Economic Review, Elsevier, vol. 47(C), pages 1-11.
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    6. Timsina, Krishna P. & Culas, Richard J., . "Impacts of Australia’s free trade agreements on trade in agricultural products: an aggregative and disaggregative analysis," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 64(3).
    7. Krishna P. Timsina & Richard J. Culas, 2020. "Impacts of Australia’s free trade agreements on trade in agricultural products: an aggregative and disaggregative analysis," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 64(3), pages 889-919, July.
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    9. Gabriel Mhonyera & Daniel Francois Meyer, 2023. "The Impact of AfCFTA on Welfare and Trade: Nigeria and South Africa in Light of Core Export Competences," Sustainability, MDPI, vol. 15(6), pages 1-16, March.

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