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Transatlantic Trade Investment Partnership

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TTIP USA EU

The CGE model captures the movement of resources into commodities where the United States is most competitive with respect to EU markets, and vice versa. Some U.S. commodities have overall, but small, decreases in export values, notably, wheat, coarse grains, soybeans, vegetable oil, and poultry meat. This is due to supply constraints against other commodities that had higher initial tariffs. Many other commodities, however, see increases in overall exports in the scenario. In fact, U.S. export values of beef, butter, cheese, and processed sugar to the EU all increase by double-digit amounts. Other U.S. commodity exports with increases include various processed foods products (e.g., prepared fruits and vegetables, cereal preparations, sugar preparations, and other foods) pork, fruits, and vegetables.

Macro Impacts

With the removal of all tariffs and TRQs, net U.S. agricultural exports and imports increase and total EU agricultural imports increase . U.S. imports increase by just over 1 percent, largely due to an increase in dairy imports. EU imports increase by about 0.6 percent, largely due to increases in dairy products and pork imports. Given the sector-level results, total agricultural exports increase by over 2 percent for the United States and decrease by 0.25 percent for the EU. For all other countries examined, agricultural imports and exports decrease. Agricultural exports decline the most for the countries without trade agreements with the United States or the EU (China, India, and Brazil). The removal of tariffs and TRQs leads to an increase in GDP for the United States and the EU but no change in GDP for the non-NAFTA countries examined . The GDPs of the other NAFTA countries (Canada and Mexico) decrease slightly due to the decrease in trade with the United States.

Market Access With NTM Removal

In the second scenario, we consider the effects of removal of selected NTMs in addition to removal of tariffs and TRQs. The allocation of NTM costs in the CGE model is discussed in appendix 3. Although a final T-TIP agreement may draw from other scenarios, such as partial reductions of NTMs, we consider their elimination and their impact an upper bound.

Trade and Production Impacts – United States

Given the removal of select NTMs in addition to tariffs and TRQs, the percentage change in U.S. exports to the EU increases in most agricultural commodities, especially those in which NTMs were analyzed (table 10). Some of the changes are considerably larger than those in the first scenario.

For example, U.S. poultry exports increased 197 percent in the market-access scenario, but when

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