We use the Michigan Model of World Production and Trade to assess the economic effects of the US bilateral FTAs negotiated with Central America, Australia and Morocco. The model covers 18 economic sectors in each of 22 countries/regions and is based on version 5.4 of the GTAP database for 1997 together with specially constructed estimates of services barriers and other data on sectoral employment and numbers of firms. The distinguishing feature of the model is that it incorporates imperfect competition in the manufacturing and services sectors, including monopolistic competition, increasing returns and product variety. The modelling focus is on the effects of the bilateral removal of tariffs on agriculture and manufactures and services barriers. Rules of origin and other restrictive measures and the non-trade aspects of the FTAs are not taken into account due to data constraints. The computational results indicate that the benefits of bilateral FTAs for the United States and partner countries are rather small in both absolute and relative terms, and that far greater benefits could be realised if the United States and its FTA partners adopted unilateral free trade and especially if multilateral free trade was adopted by all countries/regions in the global trading system.
Data provided are for informational purposes only. Although carefully collected, accuracy cannot be guaranteed. The impact factor represents a rough estimation of the journal's impact factor and does not reflect the actual current impact factor. Publisher conditions are provided by RoMEO. Differing provisions from the publisher's actual policy or licence agreement may be applicable.
[Show abstract][Hide abstract]ABSTRACT: The Australia–United States Free Trade Agreement (AUSFTA) came into effect in 2005. It was the second preferential trade agreement that Australia signed, after its agreement with Singapore, and marked a departure from the primacy of Australia's previous trade policy of unilateral and multilateral trade liberalisation toward preferential liberalisation. This paper assesses the economic effects of AUSFTA by applying the Productivity Commission's gravity model of trade from its Bilateral and Regional Trade Agreements review. The evidence reveals AUSFTA resulted in a fall in Australian and US trade with the rest of the world—that the agreement led to trade diversion. Estimates also show that AUSFTA is associated with a reduction in trade between Australia and the United States.
Preview · Article · Sep 2015 · Australian Journal Of International Affairs
" There are a number of papers in the literature evaluating the economic consequences of the Australia-US Free Trade Agreement (AUSFTA). Important contributions include Brown et. al (2005) Trade agreements have many purposes, but one important issue, especially for smaller open economies such as Australia, is the ability of such agreements to reduce economic harm which might result in the face of adverse external developments in the world trading environment. Specifically, in the case of the AUSFTA, would the existence of"
[Show abstract][Hide abstract]ABSTRACT: We use a dynamic computable general equilibrium model to revisit the dynamic benefits of the Australia-USA Free Trade Agreement and, in particular, to evaluate the insurance value of this agreement in the face of regional and global trade wars. The insurance benefits are quantified by comparing the status quo against alternative scenarios where some or all regions raise tariffs by 10 percent, both permanently and temporarily. These insurance gains are found to be as much as four times larger than the traditional status quo efficiency gains.
"A further disadvantage of a CGE approach is that the results are highly sensitive to particular methodological assumptions. For example, the U.S. ITC study of the Central American-Dominican Free Trade Agreement Republic (CAFTA-DR) free trade agreement suggested an increase in U.S. welfare of as much as $248 million (USITC 2004c) while a Michigan model estimated an increase of $17.3 billion (Brown, et al., 2005). Beyond modeling differences (such as the treatment of services), the "
[Show abstract][Hide abstract]ABSTRACT: We use fitted values from a standard gravity equation to rank countries as possible U.S. free trade agreement partners based on trade and investment potential. The European Union and Japan are ranked highest based on this methodology and individual Bush administration FTA initiatives generally generally are ranked very low. However, the combined affects of completed and proposed Bush FTAs have the potential to rank almost as high as the EU and Japan separately. This result is consistent with the view that, despite widespread criticism of the Bush administration's choices of FTA partners, the overall impact may be significant.
Preview · Article · Mar 2007 · The International Trade Journal