Interdependencies between Atlantic and Pacific agreements: Evidence from agri-food sectors

Abstract

Trade liberalization of the agri-food sector is a sensitive topic in both Transatlantic Trade and Investment Partnership (TTIP) and Trans-Pacific Partnership (TPP) discussions. This article provides an overview of current trade flows and trade barriers. Then, using a general equilibrium model of international trade (the MIRAGE model), it assesses the potential impact of these two agreements on agri-food trade and production. The results suggest that the US agri-food sectors would gain from both agreements while almost all their partners and third countries would benefit less, and might register losses in some sectors. However, the two agreements are not competing, since all the contracting parties' interests are complementary. Finally, we show that the Atlantic trade may be impacted by the inclusion of harmonized standards within the Pacific agreement but not by its extension to additional members (e.g. China or India).

The economic impact of the Trans‐Pacific Partnership: What have we learned from CGE simulation?

“…The model approach is similar to that adopted in the GTAPDyn model described in Ianchovichina and McDougall (2001), and utilized in several studies of the TPP (Cheong and Tongzon, 2013, Itakura and Lee, 2012, Lee and Itakura, 2013, and Lee and Itakura, 2014, Strutt et al, 2015.4 USITC (2016) also uses a recursive dynamic version of GTAP. The PEP model used by Cororaton and Orden (2015) 4 , the MIRAGE model used in Disdier et al (2016), and the model employed by Li (2014), are other examples of applications of recursive dynamic models with a competitive Armington structure.…”

“…The recursive dynamic studies, by design, all develop baselines going out as far as 2030 Lee, 2012 andPetri and and even 2047 (USITC, 2016). A number of studies incorporate into the baseline information on other FTAs that have already been agreed upon (e.g., Cheong and Tongzon, 2013, Disdier et al, 2016, Narayanan and Sharma, 2016, Petri et al, 2012. Several studies incorporate information on NTBs from various sources into the base data (Cororaton and Orden, 2015, Disdier et al, 2016, Itakura and Lee, 2012, Lee and Itakura, 2013, Lee and Itakura, 2014, Petri et al, 2012, Cabinet Secretariat, 2015and USITC, 2016.…”

“…A number of studies incorporate into the baseline information on other FTAs that have already been agreed upon (e.g., Cheong and Tongzon, 2013, Disdier et al, 2016, Narayanan and Sharma, 2016, Petri et al, 2012. Several studies incorporate information on NTBs from various sources into the base data (Cororaton and Orden, 2015, Disdier et al, 2016, Itakura and Lee, 2012, Lee and Itakura, 2013, Lee and Itakura, 2014, Petri et al, 2012, Cabinet Secretariat, 2015and USITC, 2016. Other more unusual data adjustments include modifications to certain behavioral parameters in Japanese agriculture in Whittaker et al (2013), and a split of the data to account for SEZs in China and Mexico in Li (2014).…”

Reflections on the Economic Modelling of Free Trade Agreements

“…Hence, a reduction of a neutral NTM is associated with an efficiency gain, the reduction of rents going to the importer is comparable to an import tax reduction and the reduction of rents destined for the exporter can be modelled as a cut in an export tax. If information on the nature of NTMs is available, such distinction can be made, see Disdier et al (2016) for an example.…”

“…Disdier et al (2016) make a distinction between the different types of impact different (agricultural) NTMs may have. They note that in the literature a distinction has been made between direct increases in costs (as above) to export to the partner country market resulting from the need to comply with certain requirements, e.g.…”