Modelling trade and other economic interactions between countries in baseline projections

Bekkers, Eddy; Antimiani, Alessandro; Carrico, Caitlyn; Flaig, Dorothee; Fontagné, Lionel; Fouré, Jean; Francois, Joseph; Itakura, Kazunori; Kutlina-Dimitrova, Zornitsa; Powers, William; Saveyn, Bert; Teh, Robert; Tongeren, Frank van; Tsigas, Marinos

doi:10.21642/jgea.050107af

Cited by 14 publications

(6 citation statements)

References 75 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…A few selected examples in this regard include Francois et al (2005), Francois et al (2013), Ciuriak and Xiao (2014)'s simulations of the Doha Round negotiation, Transatlantic Trade and Investment Partnership (TTIP), and Trans-Pacific Partnership (TPP) respectively. Finally, with regard to the WTO Global Trade Model used in this paper, it has also been applied in the modelling of baseline developments (Bekkers et al, 2020) as well as in long-run projection studies (Bekkers and Koopman, 2022).…”

Section: Linkages With Recent Literaturementioning

confidence: 99%

The Trade Effects of a New Agreement on Services Domestic Regulation

2024

WTO Working Papers

View full text Add to dashboard Cite

In this paper, we project the impact of the implementation of a Joint Statement Initiative (JSI) on Services Domestic Regulation (SDR). We proceed in three steps. First, we include the WTO SDR Index, a binary score of SDR implementation in 23 sectors and 86 economies, in a gravity equation, estimated with the balance of payments services trade. We take into account domestic services trade to identify the impact of the importer-specific SDR Index by interacting the SDR Index with a border dummy, following an established methodology in the gravity literature. The estimation generates a significant impact of the SDR Index in a series of regressions pooled across all sectors, accounting for other determinants of services trade. Second, we map the estimates together with projected changes in the SDR Index into ad valorem equivalent trade cost changes under the implementation of the negotiated outcome on SDR. Estimated trade cost reductions are 10%, 14%, and 8.5% in lower-middleincome, upper-middle-income, and high-income countries respectively. In dollars, the estimated trade cost reduction of $127 Bn is similar to earlier OECD estimates of the trade cost reduction of the SDR of about $150 Bn. Third, the WTO Global Trade Model, a recursive dynamic computable general equilibrium (CGE) model, is employed to project the economic effects of the SDR outcome which are modelled as resourcesaving reductions in iceberg trade costs. Simulations indicate that global income would increase by 0.3% in the long run (over 10 years), while global exports are projected to rise by 0.8%. The projected gains are largest in lower-and upper-middle-income countries while impacts on non-participants are projected to be marginally positive.

show abstract

Section: Linkages With Recent Literaturementioning

confidence: 99%

The Trade Effects of a New Agreement on Services Domestic Regulation

2024

WTO Working Papers

View full text Add to dashboard Cite

show abstract

“…The literature on trade projections (c.f. Fontagné et al (2017) and Bekkers et al (2020)) have emphasized that historical growth in real trade has been outpacing growth in real GDP. Our projections also display this pattern because of reductions in trade costs and higher than average productivity growth of the transportation sector.…”

Section: Trade Grows Faster Than Gdpmentioning

confidence: 99%

How will global trade patterns evolve in the long run?

2023

WTO Working Papers

View full text Add to dashboard Cite

In this paper the evolution of global trade patterns until 2050 is projected with a recursive dynamic computable general equilibrium (CGE) model. Feeding the model with exogenous projections on macroeconomic, demographic, sectoral and trade cost variables, the evolution of trade patterns emerges endogenously from the model. The approach is innovative in both modelling approach and exogenous inputs. GDP growth emerges endogenously in the model because of diffusion of ideas as a result of international trade and trade cost changes are based on estimates of technology and trade policy changes. The projections indicate that (i) because of projected reductions in trade costs, trade will grow more than GDP, generating a global trade-to-GDP growth rate of 1.1; (ii) because of structural change, the global share of manufacturing trade falls from 64% in 2020 to 52% by 2050, whereas the share of services trade rises substantially from 24% to 38%; (iii) because of technological catch-up, the share in global trade of both developing and least-developed countries (LDCs) will rise (with developing countries overtaking developed economies around 2035), the share of intra-developed country trade will fall, whereas the share of intra-developing country trade and those between developing and developed countries will rise.

show abstract

“…Oil prices in the baseline scenario are guided by the International Energy Agency's World Energy Outlook 2019 (IEA, 2019). It is difficult to implement large fluctuations in oil prices in CGE models (Bekkers et al, 2020;p. 312) international water transport, and other mining cannot exceed GDP growth.…”

Section: Oil Pricesmentioning

confidence: 99%