Preferential Trade Agreements and the Optimal Liberalisation of Agricultural Trade
Recent years have seen a rapid growth in the number of preferential trade agreements (PTAs) between developed and developing economies. Typically however many of these PTAs only incorporate a partial liberalisation of food and agricultural trade by developed economies. This paper reports the results from simulations conducted using a global comparative static model CGE model that has been calibrated with data from the GTAP database (version 5). Using the EU RSA FTA as an example the results indicate that the optimal degree of food trade liberalisation by the EU is less than 100 percent, and declines appreciably after the optimum. Qualitatively similar results emerge for South Africa. However, the welfare gains for South Africa increase rapidly with the increasing liberalisation of EU food and agricultural trade, while the welfare gains for the EU increase slowly with the increasing liberalisation of South African food trade. These results indicate that bilateral trade negotiations between developing and developed countries may involve a complex bargaining process, wherein the payoffs from different strategies are neither necessarily intuitively obvious nor are they necessarily consistent with the full liberalisation of food trade by developed economies.
|Date of creation:||Aug 2004|
|Date of revision:||Aug 2004|
|Contact details of provider:|| Postal: |
Phone: +44 114 222 3399
Fax: + 44 (0)114 222 3458
Web page: http://www.shef.ac.uk/economicsEmail:
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Kilkenny, Maureen & Robinson, Sherman, 1990.
"Computable general equilibrium analysis of agricultural liberalization: Factor mobility and macro closure,"
Journal of Policy Modeling,
Elsevier, vol. 12(3), pages 527-556.
- Kilkenny, Maureen & Robinson, Sherman, 1990. "Computable General Equilibrium Analysis of Agricultural Liberalization: Factor Mobility and Macro Closure," Staff General Research Papers 11124, Iowa State University, Department of Economics.
- John Whalley, 1984. "Trade Liberalization among Major World Trading Areas," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262231204, August.
- Hamilton, Bob & Whalley, John, 1983. "Optimal tariff calculations in alternative trade models and some possible implications for current world trading arrangements," Journal of International Economics, Elsevier, vol. 15(3-4), pages 323-348, November.
- Whalley, John, 1984. "The North-South Debate and the Terms of Trade: An Applied General Equilibrium Approach," The Review of Economics and Statistics, MIT Press, vol. 66(2), pages 224-34, May.
- Hamilton, Robert W & Whalley, John, 1985. "Geographically Discriminatory Trade Arrangements," The Review of Economics and Statistics, MIT Press, vol. 67(3), pages 446-55, August.
- Huff, Karen & Thomas W. Hertel, 2001. "Decomposing Welfare Changes in GTAP," GTAP Technical Papers 308, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
- Hanslow, Kevin, 2000. "A General Welfare Decomposition for CGE Models," GTAP Technical Papers 498, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
- Whalley, John, 1982. "An evaluation of the Tokyo Round trade agreement using general equilibrium computational methods," Journal of Policy Modeling, Elsevier, vol. 4(3), pages 341-361, November.
- Krueger, Anne O & Schiff, Maurice & Valdes, Alberto, 1988. "Agricultural Incentives in Developing Countries: Measuring the Effect of Sectoral and Economywide Policies," World Bank Economic Review, World Bank Group, vol. 2(3), pages 255-71, September.
- Lewis, Jeffrey D. & Robinson, Sherman & Thierfelder, Karen, 2001.
"Free trade agreements and the SADC economies,"
TMD discussion papers
80, International Food Policy Research Institute (IFPRI).
- Scott McDonald & Terrie Walmsley, 2008.
"Bilateral Free Trade Agreements and Customs Unions: The Impact of the EU Republic of South Africa Free Trade Agreement on Botswana,"
The World Economy,
Wiley Blackwell, vol. 31(8), pages 993-1029, 08.
- Walmsley, Terrie & Scott McDonald, 2003. "Bilateral Free Trade Agreements and Customs Unions: The Impact of the EU Republic of South Africa Free Trade Agreement on Botswana," GTAP Working Papers 1644, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
- Lloyd, P. J. & MacLaren, D., 2002.
"Measures of trade openness using CGE analysis,"
Journal of Policy Modeling,
Elsevier, vol. 24(1), pages 67-81, March.
- Brown, Drusilla K., 1987. "Tariffs, the terms of trade, and national product differentiation," Journal of Policy Modeling, Elsevier, vol. 9(3), pages 503-526.
- Deardorff, Alan V. & Stern, Robert M., 1981. "A disaggregated model of world production and trade: An estimate of the impact of the Tokyo Round," Journal of Policy Modeling, Elsevier, vol. 3(2), pages 127-152, May.
When requesting a correction, please mention this item's handle: RePEc:shf:wpaper:2004010. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jacob Holmes)
If references are entirely missing, you can add them using this form.