Nothing Special   »   [go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/zbw/oefseb/10.html
   My bibliography  Save this paper

Ex-ante versus ex-post assessments of the economic benefits of Free Trade Agreements: Lessons from the North American Free Trade Agreement (NAFTA)

Author

Listed:
  • Grumiller, Jan-Augustin
Abstract
Much of the current discussion about the Transatlantic Trade and Investment Partnership (TTIP) is focused on the potential welfare and employment effects. Supporters of TTIP often support their argument by highlighting the optimistic results of computable general equilibrium (CGE) models. CGE-models are the methodological backbone of most ex-ante impact assessments of free-trade agreements, as for instance published by the European Commission. The objective of this paper is to assess the accurateness of ex-ante studies by scrutinizing the example of the North American Free Trade Agreement (NAFTA). The analysis suggests that a considerable gap exists between ex-ante projections and ex-post evaluations with regard to NAFTA's effects on welfare, wages and employment. Most exante models had a tendency to overestimate the benefits and underestimate the costs of free-trade. The experience of NAFTA reveals the weak credibility of ex-ante simulations. Policy makers should thus treat the formers' results with the appropriate skepticism.

Suggested Citation

  • Grumiller, Jan-Augustin, 2014. "Ex-ante versus ex-post assessments of the economic benefits of Free Trade Agreements: Lessons from the North American Free Trade Agreement (NAFTA)," Briefing Papers 10, Austrian Foundation for Development Research (ÖFSE).
    • Handle: RePEc:zbw:oefseb:10
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/99059/1/79090036X.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Alfredo Cuevas & Miguel Messmacher & Alejandro Werner, 2005. "Foreign Direct Investment in Mexico since the Approval of," The World Bank Economic Review, World Bank, vol. 19(3), pages 473-488.
    2. Baldwin, Richard E. & Venables, Anthony J., 1995. "Regional economic integration," Handbook of International Economics, in: G. M. Grossman & K. Rogoff (ed.), Handbook of International Economics, edition 1, volume 3, chapter 31, pages 1597-1644, Elsevier.
    3. Brown, Drusilla K & Deardorff, Alan V & Stern, Robert M, 1992. "North American Integration," Economic Journal, Royal Economic Society, vol. 102(415), pages 1507-1518, November.
    4. repec:fth:michin:312 is not listed on IDEAS
    5. Lorenzo Caliendo & Fernando Parro, 2015. "Estimates of the Trade and Welfare Effects of NAFTA," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 82(1), pages 1-44.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. André Pineli & Rajneesh Narula, 2023. "Industrial policy matters: the co-evolution of economic structure, trade, and FDI in Brazil and Mexico, 2000–2015," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 50(2), pages 399-444, June.
    2. Joanna Dzialo & Bogna Gawronska-Nowak & Ziemowit Stanczyk, 2017. "What do we really know about the Transatlantic Trade and Investment Partnership: Facts versus myths? Trying to understand social expectations," International Journal of Business and Economic Sciences Applied Research (IJBESAR), International Hellenic University (IHU), Kavala Campus, Greece (formerly Eastern Macedonia and Thrace Institute of Technology - EMaTTech), vol. 11(1), pages 52-60, December.
    3. Zainuddin, Muhamad Rias K V & Shukor, Md Shafiin & Zulkifli, Muhamad Solehuddin & Abdullah, Amirul Hamza, 2021. "Dynamics of Malaysia’s Bilateral Export Post Covid-19: A Gravity Model Analysis," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 55(1), pages 51-69.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Raza, Werner G. & Grumiller, Jan & Taylor, Lance & Tröster, Bernhard & von Arnim, Rudi, 2014. "ASSESS_TTIP: Assessing the claimed benefits of the Transatlantic Trade and Investment Partnership (TTIP)," Research Reports 1/2014, Austrian Foundation for Development Research (ÖFSE).
    2. Rossella Bardazzi & Leonardo Ghezzi, 2022. "Large-scale multinational shocks and international trade: a non-zero-sum game," Economic Systems Research, Taylor & Francis Journals, vol. 34(4), pages 383-409, October.
    3. Julian Hinz, 2023. "The ties that bind: geopolitical motivations for economic integration," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 159(1), pages 51-100, February.
    4. Costinot, Arnaud & Rodríguez-Clare, Andrés, 2014. "Trade Theory with Numbers: Quantifying the Consequences of Globalization," Handbook of International Economics, in: Gopinath, G. & Helpman, . & Rogoff, K. (ed.), Handbook of International Economics, edition 1, volume 4, chapter 0, pages 197-261, Elsevier.
    5. Anderson, James E. & Yotov, Yoto V., 2016. "Terms of trade and global efficiency effects of free trade agreements, 1990–2002," Journal of International Economics, Elsevier, vol. 99(C), pages 279-298.
    6. Swati Dhingra & Hanwei Huang & Gianmarco Ottaviano & João Paulo Pessoa & Thomas Sampson & John Van Reenen, 2017. "The costs and benefits of leaving the EU: trade effects," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 32(92), pages 651-705.
    7. Andrei A. Levchenko & Jing Zhang, 2012. "Comparative advantage and the welfare impact of European integration [General equilibrium analysis of the Eaton–Kortum model of international trade]," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 27(72), pages 567-602.
    8. Rodrigo Adao & Arnaud Costinot & Dave Donaldson, 2017. "Nonparametric Counterfactual Predictions in Neoclassical Models of International Trade," American Economic Review, American Economic Association, vol. 107(3), pages 633-689, March.
    9. Zhang, Lin & Cui, Lin & Li, Sali & Lu, Jiangyong, 2018. "Who rides the tide of regionalization: Examining the effect of the China-ASEAN Free Trade Area on the exports of Chinese firms," International Business Review, Elsevier, vol. 27(3), pages 501-513.
    10. Mario Larch & Yoto V. Yotov, 2016. "General Equilibrium Trade Policy Analysis with Structural Gravity," CESifo Working Paper Series 6020, CESifo.
    11. Dani Rodrik, 2018. "Populism and the economics of globalization," Journal of International Business Policy, Palgrave Macmillan, vol. 1(1), pages 12-33, June.
    12. Felbermayr Gabriel & Steininger Marina, 2019. "Revisiting the Euro’s Trade Cost and Welfare Effects," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 239(5-6), pages 917-956, October.
    13. Redding, Stephen & Weinstein, David, 2017. "Aggregating From Micro to Macro Patterns of Trade," CEPR Discussion Papers 12446, C.E.P.R. Discussion Papers.
    14. Yuko Imura, 2023. "Reassessing Trade Barriers with Global Production Networks," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 51, pages 77-116, December.
    15. Pauly, Stefan & Stipanicic, Fernando, 2021. "The creation and diffusion of knowledge: Evidence from the Jet Age," CEPREMAP Working Papers (Docweb) 2112, CEPREMAP.
    16. Andrei A Levchenko & Jing Zhang, 2013. "The Global Labor Market Impact of Emerging Giants: A Quantitative Assessment," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 61(3), pages 479-519, August.
    17. Jonathan Eaton & Samuel Kortum & Brent Neiman & John Romalis, 2016. "Trade and the Global Recession," American Economic Review, American Economic Association, vol. 106(11), pages 3401-3438, November.
    18. Ambec, Stefan & Esposito, Federico & Pacelli, Antonia, 2024. "The economics of carbon leakage mitigation policies," Journal of Environmental Economics and Management, Elsevier, vol. 125(C).
    19. Carluccio, Juan & Gautier, Erwan & Guilloux-Nefussi, Sophie, 2023. "Dissecting the impact of imports from low-wage countries on inflation," European Economic Review, Elsevier, vol. 160(C).
    20. Greenaway, David & Torstensson, Johan, 2000. "Economic Geography, Comparative Advantage and Trade within Industries: Evidence from the OECD," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 15, pages 260-280.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:oefseb:10. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/ofsewat.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.