Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/241853 
Year of Publication: 
2021
Citation: 
[Journal:] Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie [ISSN:] 1744-7976 [Volume:] 69 [Issue:] 3 [Publisher:] Wiley [Place:] Hoboken, NJ [Year:] 2021 [Pages:] 415-442
Publisher: 
Wiley, Hoboken, NJ
Abstract: 
Policymakers are increasingly relying on computable general equilibrium (CGE) models to provide economy-wide impacts of trade agreements; however, these assessments often make the simplifying assumption of complete bilateral tariff elimination. But agreements typically involve partial tariff elimination for sensitive sectors—which are often differentiated at the tariff line. As such, applying a uniform tariff reduction in a CGE sector that encompasses many products could introduce bias. We propose a tariff line approach for modelling exemptions for sensitive goods in CGE models with the aim of reducing this bias. This approach is tested for the Canada–EU trade agreement, and systematically compared to standard approaches to bilateral trade liberalisation in CGE analysis. We find that more common approaches might systematically overestimate trade and welfare impacts by neglecting partial liberalisation in selected sectors and/or not considering substitution across tariff lines.
Subjects: 
aggregation bias
CETA
computable general equilibrium
free trade agreements
sensitive products
tariff line analysis
trade policy
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Article
Document Version: 
Published Version

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