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Deep trade policy options for Armenia: The importance of trade facilitation, services and standards liberalization

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  • Jensen, Jesper
  • Tarr, David G.

Abstract

In this paper the authors develop an innovative 21 sector computable general equilibrium model of Armenia to assess the impact on Armenia of a Deep and Comprehensive Free Trade Agreement (DCFTA) with the EU, as well as further regional or multilateral trade policy commitments. They find that a DCFTA with the EU will likely result in substantial gains to Armenia, but they show that the gains derive from the deep aspects of the agreement. In order of importance, the sources of the gains are: (i) trade facilitation and reduction in border costs; (ii) services liberalization; and (iii) standards harmonization. A shallow agreement with the EU that focuses only on preferential tariff liberalization in goods will likely lead to small losses to Armenia primarily due to a loss of productivity from lost varieties of technologies from the Rest of the World region in manufactured products. Additional gains can be expected in the long run from an improvement in the investment climate. The authors estimate only small gains from a services agreement with the CIS countries, but significant gains from expanding services liberalization multilaterally.

Suggested Citation

  • Jensen, Jesper & Tarr, David G., 2012. "Deep trade policy options for Armenia: The importance of trade facilitation, services and standards liberalization," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy (IfW), vol. 6, pages 1-54.
  • Handle: RePEc:zbw:ifweej:20121
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    File URL: http://dx.doi.org/10.5018/economics-ejournal.ja.2012-1
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    File URL: https://www.econstor.eu/bitstream/10419/54198/1/682078336.pdf
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Latorre, María C., 2016. "A CGE Analysis of the Impact of Foreign Direct Investment and Tariff Reform on Female and Male Workers in Tanzania," World Development, Elsevier, vol. 77(C), pages 346-366.
    2. repec:bla:worlde:v:40:y:2017:i:12:p:2564-2591 is not listed on IDEAS
    3. Tarr, David G., 2013. "Putting Services and Foreign Direct Investment with Endogenous Productivity Effects in Computable General Equilibrium Models," Handbook of Computable General Equilibrium Modeling, Elsevier.
    4. World Bank, 2016. "Assessing the Impact of WTO Accession on Belarus," World Bank Other Operational Studies 24698, The World Bank.
    5. Ana Paula Cusolito & Raed Safadi & Daria Taglioni, 2016. "Inclusive Global Value Chains," World Bank Publications, The World Bank, number 24910, July.
    6. Hannah Schuerenberg-Frosch, 2015. "How to Model a Child in School? A Dynamic Macrosimulation Study for Tanzania," South African Journal of Economics, Economic Society of South Africa, vol. 83(1), pages 117-139, March.
    7. Zhou, Jing & Latorre, María C., 2014. "How FDI influences the triangular trade pattern among China, East Asia and the U.S.? A CGE analysis of the sector of Electronics in China," Economic Modelling, Elsevier, vol. 44(S1), pages 77-88.
    8. Tarr, David, 2012. "Impact of services liberalization on industry productivity, exports and development : six empirical studies in the transition countries," Policy Research Working Paper Series 6023, The World Bank.
    9. World Bank, 2016. "Moldova Trade Study," World Bank Other Operational Studies 24043, The World Bank.
    10. Edward J. Balistreri & Zoryana Olekseyuk & David G. Tarr, 2017. "Privatisation and the unusual case of Belarusian accession to the WTO," The World Economy, Wiley Blackwell, vol. 40(12), pages 2564-2591, December.
    11. Olekseyuk, Zoryana & Schürenberg-Frosch, Hannah, 2016. "Are Armington elasticities different across countries and sectors? A European study," Economic Modelling, Elsevier, vol. 55(C), pages 328-342.

    More about this item

    Keywords

    trade facilitation; services liberalization; standards harmonization; preferential liberalization; multinationals; monopolistic competition; foreign direct investment; endogenous productivity effects;

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure

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