Regional Trade Agreements versus Global Trade Liberalisation: Implications for a Small Island Developing State

Asafu-Adjaye, John and Mahadevan, Renuka (2009) Regional Trade Agreements versus Global Trade Liberalisation: Implications for a Small Island Developing State. The World Economy, 32 3: 509-529. doi:10.1111/j.1467-9701.2008.01117.x


Author Asafu-Adjaye, John
Mahadevan, Renuka
Title Regional Trade Agreements versus Global Trade Liberalisation: Implications for a Small Island Developing State
Journal name The World Economy   Check publisher's open access policy
ISSN 0379-5920
Publication date 2009-03-01
Year available 2008
Sub-type Article (original research)
DOI 10.1111/j.1467-9701.2008.01117.x
Open Access Status Not yet assessed
Volume 32
Issue 3
Start page 509
End page 529
Total pages 20
Editor D. Greenaway
J. Whalle
Place of publication UK
Publisher Wiley-Blackwell Publishing
Language eng
Subject 140202 Economic Development and Growth
140299 Applied Economics not elsewhere classified
910301 International Agreements on Trade
910303 Trade Policy
C1
Abstract This study undertakes an empirical investigation of the macroeconomic and sectoral impacts of two forms of regional trade agreements vis-à-vis global trade liberalisation on a small island country, using Fiji as a case study. In order to capture the feedback effects of such a complex set of policies, we employ a dynamic computable general equilibrium model of the Fijian economy to investigate (i) the impact of the Pacific Island Countries Trade Agreement (PICTA), (ii) the impact of PICTA, the Pacific Agreement for Closer Economic Relations (PACER), and the Economic Partnership Agreements (EPAs), (iii) the impact of full tariff liberalisation (i.e. tariff removal only), and (iv) the impact of full trade liberalisation, with removal of both tariff and non-tariff barriers. While PICTA consistently provides the least benefits across a range of macroeconomic indicators including real output, welfare, trade volumes and employment, full trade liberalisation involving the removal of tariff and non-tariff barriers provides the greatest benefits compared to the other scenarios in terms of real output. However, the latter scenario is outperformed by PICTA, PACER, the EPAs and full tariff liberalisation in terms of welfare effects, trade volumes and employment. The policy implications hold important lessons for developing countries considering trade liberalisation.
Keyword PREFERENCES
Q-Index Code C1
Q-Index Status Confirmed Code
Institutional Status UQ

Document type: Journal Article
Sub-type: Article (original research)
Collections: 2009 Higher Education Research Data Collection
School of Economics Publications
 
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Created: Thu, 16 Apr 2009, 20:09:53 EST by Kaelene Matts on behalf of School of Economics