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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:

    1. 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.
    2. Howard, Sam & Gow, Hamish R. & Ozer-Balli, Hatice, 2011. "New Zealand's Preferential Trading Arrangements: Implications for the New Zealand Dairy Industry," 2011 Conference, August 25-26, 2011, Nelson, New Zealand 115405, New Zealand Agricultural and Resource Economics Society.
    3. Górska, Rumiana, 2019. "Effects of EU-Japan economic partnership agreement for selected EU countries," Conference papers 333048, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    4. 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.
    5. Knobel, Alexander & Chokaev, Bekhan, 2014. "Possible Economic Outcomes of a Trade Agreement with the European Union," EconStor Preprints 121853, ZBW - Leibniz Information Centre for Economics.
    6. Qing Zhou & Saiya Li & Yali Zhang, 2023. "Combined Impacts of COVID-19 Pandemic and Locust Plague on Grain Production and Trade Patterns in South Asia," Agriculture, MDPI, vol. 13(6), pages 1-14, June.
    7. 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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