Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/49298
Year of Publication: 
2011
Series/Report no.: 
Economics Discussion Papers No. 2011-33
Publisher: 
Kiel Institute for the World Economy (IfW), Kiel
Abstract: 
In this paper the authors develop an innovative 21 sector computable general equilibrium model of Armenia to assess the impact on Armenia of a Deep and Comprehensive Free Trade Agreement (DCFTA) with the EU, as well as further regional or multilateral trade policy commitments. The authors find that a DCFTA with the EU will likely result in substantial gains to Armenia, but they show that the gains derive from the deep aspects of the agreement. In order of importance, the sources of the gains are: (i) trade facilitation and reduction in border costs; (ii) services liberalization; and (iii) standards harmonization. A shallow agreement with the EU that focuses only on preferential tariff liberalization in goods will likely lead to small losses to Armenia primarily due to a loss of productivity from lost varieties of technologies from the Rest of the World region in manufactured products. Additional gains can be expected in the long run from an improvement in the investment climate. The authors estimate only small gains from a services agreement with the CIS countries, but significant gains from expanding services liberalization multilaterally.
Subjects: 
Trade facilitation
services liberalization
standards harmonization
preferential liberalization
multinationals
monopolistic competition
foreign direct investment
endogenous productivity effects
JEL: 
F12
F13
F14
F15
F17
C68
L16
Creative Commons License: 
cc-by-nc Logo
Document Type: 
Working Paper

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