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Spillover effects of TTIP on BRICS economies : a dynamic GVC-based CGE model

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  • Cai, Songfeng
  • Zhang, Yaxiong
  • Meng, Bo

Abstract

This paper uses a GVC (Global Value Chain)-based CGE model to assess the impact of TTIP between the U.S. and the EU on their main trading partners who are mainly engaged at the low end in the division system of global value chains, such as BRICS countries. The simulation results indicate that in general the TTIP would positively impact global trade and economies due to the reduction of both tariff and non-tariff barriers. With great increases in the US–EU bilateral trade, significant economic gains for the U.S. and the EU can be expected. For most BRICS countries, the aggregate exports and GDP suffer small negative impacts from the TTIP, except Brazil, but the inter-country trade within BRICS economies increases due to the substitution effect between the US–EU trade and the imports from BRICS countries when the TTIP commences.

Suggested Citation

  • Cai, Songfeng & Zhang, Yaxiong & Meng, Bo, 2015. "Spillover effects of TTIP on BRICS economies : a dynamic GVC-based CGE model," IDE Discussion Papers 485, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    • Handle: RePEc:jet:dpaper:dpaper485
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    References listed on IDEAS

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    6. Thomas W. Hertel & Terrie Walmsley & Ken Itakura, 2005. "Dynamic Effects Of The "New Age" Free Trade Agreement Between Japan And Singapore," World Scientific Book Chapters, in: Philippa Dee & Michael Ferrantino (ed.), Quantitative Methods For Assessing The Effects Of Non-Tariff Measures And Trade Facilitation, chapter 18, pages 483-523, World Scientific Publishing Co. Pte. Ltd..
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    Cited by:

    1. Itakura, Ken & Lee, Hiro, 2019. "Estimating the Effects of the CPTPP and RCEP in a General Equilibrium Framework with Global Value Chains," Conference papers 333031, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    2. Dazhong Cheng & Jian Wang & Zhiguo Xiao, 2022. "Free trade agreements partnership and value chain linkages: Evidence from China," The World Economy, Wiley Blackwell, vol. 45(8), pages 2532-2559, August.
    3. D. A. Izotov, 2017. "Liberalization of Russia’s trade with the European Union, BRICS, and Trans-Pacific Partnership countries," Studies on Russian Economic Development, Springer, vol. 28(3), pages 338-345, May.

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    More about this item

    Keywords

    Brazil; India; China; Russia; United States; Europe; International trade; Economic conditions; Trade policy; TTIP; BRICS; GVC; NTBs; Spillover;
    All these keywords.

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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