FTA Impact Assessments
In the past two decades in particular, the number of regional trade agreements (RTAs) has ballooned, from 83 in force in 2000 to over 300 in 2020. Moreover, they have become increasingly complex, with many of their provisions having little to do with “free trade” at all. CapTrade has conducted analyses alongside this evolution of trade agreements, and is able to assist governments, trade associations, and industries in assessing the gains and losses associated with any trade agreement.
Modeling Free Trade Agreements
With the Doha Round stuck in neutral, many countries are considering bilateral free trade agreements (FTAs). Capital Trade has been asked by governments, companies, and industry associations to examine the potential effects on trade flows, GDP, welfare, employment, and industry output of various FTAs involving countries in North America, South America, Southeast Asia, the Middle East, Europe, and Oceania. Economic assessments have utilized the GTAP model and database to analyze effects on broad industry categories.
When clients are also concerned with effects on narrower product groupings, Capital Trade has used the USITC’s COMPAS model and the SMART model, part of the World Bank’s World Integrated Trade Solution. These partial equilibrium models allow for more targeted analysis of individual products and narrower product groupings.
Engagements have:
Compared the GDP gains across potential FTAs;
Examined potential trade effects of an FTA on automotive “transplants” in the United States;
And compared welfare, GDP, and industry-specific gains among various ASEAN countries in their proposed FTAs with the EU.
