The Economic Impact of Tariff Eliminations in a U.S.-U.K. Free Trade Agreement: A CGE Model with Worker Displacement

2021 ◽  
Author(s):  
Jeff Ferry ◽  
G. Badri Narayanan ◽  
Amanda Mayoral
Keyword(s):  
Economic Impact ◽  
Free Trade ◽  
Free Trade Agreement ◽  
Trade Agreement ◽  
Cge Model ◽  
Worker Displacement

scholarly journals Analysis of Welfare Effects of South Asia Free Trade Agreement (SAFTA) on Pakistan’s Economy by Using CGE Model

2010 ◽  
Vol 7 (1) ◽  
Author(s):  
Imamuddin Khoso ◽  
Nanik Ram ◽  
Asif Ali Shah ◽  
Kamran Shafiq ◽  
Faiz. M. Shaikh
Keyword(s):  
South Asia ◽  
Free Trade ◽  
Free Trade Agreement ◽  
Trade Agreement ◽  
Welfare Effects ◽  
Cge Model

scholarly journals Impact of removing industrial tariffs under the European–Vietnam free trade agreement

2019 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Le Trung Ngoc Phat ◽  
Nguyen Kim Hanh
Keyword(s):  
Social Welfare ◽  
Free Trade ◽  
Free Trade Agreement ◽  
Trade Agreement ◽  
Household Consumption ◽  
Industrial Sector ◽  
Cge Model ◽  
Content Type ◽  
Factors Of Production ◽  
The Impact

Purpose The purpose of this paper is to employ the computable general equilibrium (CGE) approach to examine how the European–Vietnam Free Trade Agreement (EVFTA) impacts on the Vietnamese economy in the case of the removal of industrial tariffs. Design/methodology/approach The authors construct a social accounting matrix based on the latest data of the Vietnam input-output Table for the year 2012 and then apply the CGE model to simulate the economic scenarios when the tariff rate of the industrial sector reduces to 0 percent. Findings The first simulation results demonstrate that the elimination of tariffs in the industrial sector will lead to a 9.13 percent increase in household consumption, together with an increase in the factors of production of the agricultural, industrial and service sectors by 9.61, 9.74 and 8.21 percent, respectively. The EVFTA also causes a deficit in the trade balance because the value of imports increases by 12.54 percent, while exports’ value slightly increases by 2.71 percent. Furthermore, there has been a drop of 2.29 percent in the total government income; nevertheless, social welfare witnesses a gain of 9.13 percent. The second scenario simulation draws crucial attention to policymakers that a small fluctuation in the production tax rate will cause a significant change in the economy. Practical implications The reduction of tariff in the industrial sector will increase the social welfare and strengthen the whole economy regarding the growth of household consumption, factors of production and trade value. On the unfavorable side, the EVFTA causes a national budget deficit and puts pressure on domestic production. This paper is a valuable reference for governments and policymakers when they decide to reduce tariffs or adjust production taxes once Vietnam integrates into the world economy. Originality/value This study differs from previous research works by utilizing a static CGE model to investigate the impact of removing the industrial tariff on the economy under EVFTA.

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