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Modeling the Effects of Free Trade Agreements between the EU and Canada, USA and Moldova/Georgia/Armenia on the Austrian Economy: Model Simulations for Trade Policy Analysis

  • Joseph Francois
  • Olga Pindyuk

This study examines the economic impact on Austria of three possible new EU free trade agreements: (1) an EU-US agreement; (2) an EU-Canada agreement; and (3) an EUArmenia/Georgia/Moldova agreement. This is done with a computational model of the global economy. The trade agreements are modeled as a mix of preferential tariff reductions and reductions in non-tariff measures that affect both goods and services. The primary impact follows from NTM reduction rather than tariff reductions. Of the three agreements, a potential agreement with the US is by far the most important. This follows from the size of the US economy. The US accounts for roughly one-quarter of extra-EU Austrian exports. Overall, the combined impact of the FTAs studied is positive. Most of the impact follows from investment response. Productivity gains from NTM reduction mean a combination of increased national income, higher wages, and employment, and increased capital stocks for the Austrian economy.

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Paper provided by FIW in its series FIW Research Reports series with number IV-003.

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Length: 38
Date of creation: Jan 2013
Date of revision:
Handle: RePEc:wsr:ecbook:2013:i:iv-003
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Order Information: Postal: FIW Project Office Austrian Institute of Economic Research Arsenal Objekt 20 A-1030 Vienna
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  1. Lionel Fontagné & Amélie Guillin & Cristina Mitaritonna, 2011. "Estimations of Tariff Equivalents for the Services Sectors," Working Papers 2011-24, CEPII research center.
  2. Joseph Francois & Bernard Hoekman, 2010. "Services Trade and Policy," Journal of Economic Literature, American Economic Association, vol. 48(3), pages 642-92, September.
  3. Oecd, 2011. "The Impact of Trade Liberalisation on Jobs and Growth: Technical Note," OECD Trade Policy Papers 107, OECD Publishing.
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