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Methods for Ex Ante Economic Evaluation of Free Trade Agreements

Author

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  • Cheong, David

    (World Trade Institute)

Abstract

This paper provides practical techniques to policymakers for evaluating the potential economic effects of a Free Trade Agreement (FTA). To this end, the paper discusses how to apply three methods: (i) trade indicators, (ii) SMART (Software for Market Analysis and Restrictions on Trade) in WITS (World Integrated Trade Solutions), and (iii) the GTAP (Global Trade Analysis Project) model. The paper identifies the different aspects of an FTA that each method can evaluate, describes data sources and software requirements, specifies how to interpret the output from each method, and discusses the strengths and limitations of each method. To illustrate each method, there are examples applied to countries in the Association of Southeast Asian Nations (ASEAN), particularly Cambodia, Lao People‘s Democratic Republic, and Viet Nam.

Suggested Citation

  • Cheong, David, 2010. "Methods for Ex Ante Economic Evaluation of Free Trade Agreements," Working Papers on Regional Economic Integration 52, Asian Development Bank.
    • Handle: RePEc:ris:adbrei:0052
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    References listed on IDEAS

    as
    1. Park, Cyn-Young & Majuca, Ruperto & Yap, Josef, 2010. "The 2008 Financial Crisis and Potential Output in Asia: Impact and Policy Implications," Working Papers on Regional Economic Integration 45, Asian Development Bank.
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    Citations

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    Cited by:

    1. Agnieszka Sapa & Agnieszka Baer-Nawrocka, 2014. "Konwergencja wydajności pracy w rolnictwie a intensywność handlu rolno-żywnościowego w amerykańskich ugrupowaniach handlowych," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 3, pages 111-131.
    2. Anwesha Basu, 2022. "The India–EU FTA and Its Potential Impact on India’s Dairy Sector: A Quantitative Analysis," Foreign Trade Review, , vol. 57(1), pages 7-26, February.
    3. Hansa Jain, 2019. "Implications of SAFTA for Indian Economy: Trade, Compatibility and Welfare Effects," Foreign Trade Review, , vol. 54(4), pages 355-374, November.
    4. Ekaterina Y. ARAPOVA, 2017. "Ex-Post Analysis Of The Influence Of Tariff Liberalisation On Asean Exports," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 17(2), pages 135-154.
    5. Nawrocka, Agnieszka Baer & Sapa, Agnieszka, 2013. "Agricultural Labour Productivity and the Intensity of Agri-food Trade in Selected Regional Trade Agreements," 2013: Productivity and Its Impacts on Global Trade, June 2-4, 2013. Seville, Spain 152381, International Agricultural Trade Research Consortium.

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    More about this item

    Keywords

    regionalization; evaluation methods; trade indicators; SMART model; CGE analysis; preferential trade agreements; Asia;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration

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    This paper has been announced in the following NEP Reports:

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