World Tariff Liberalization in Agriculture: An Assessment Following a Global CGE Trade Model for EU15 Regions

Journal of Policy Modeling, Volume 34, Issue 2, March–April 2012, Pages 155-180

FEEM Working Paper No. 25.2014

CMCC Research Paper No. RP0223

Posted: 13 Mar 2014 Last revised: 29 Sep 2014

See all articles by Gabriele Standardi

Gabriele Standardi

Fondazione Eni Enrico Mattei

Federico Perali

University of Verona - Department of Economics

Luca Pieroni

University of Perugia - Department of Economics

Date Written: March 12, 2014

Abstract

This paper aims at modeling a global CGE trade model for the EU15 subnational regions. This model is used to assess production reallocation across sectors in each EU15 region, assuming a scenario in which world tariff liberalization is implemented in the agricultural sector. The model is parsimonious in terms of data, focusing on unskilled and skilled labor as the source of heterogeneity across regions. A stylized model is built to interpret trade policy effects. Results show decreases in agricultural production in the EU15 of about 0.93%. All regions reduce agriculture but show different magnitudes in the relative changes of production. Large reallocation effects are observed between manufactures and services, some regions specializing in the former and others in the latter. In addition, the introduction of labor mobility within the EU15 and the EU27 causes strong amplification effects in manufactures and services.

Keywords: CGE modeling; International trade; Agriculture

JEL Classification: F13, D58, Q17

Suggested Citation

Standardi, Gabriele and Perali, Federico and Pieroni, Luca, World Tariff Liberalization in Agriculture: An Assessment Following a Global CGE Trade Model for EU15 Regions (March 12, 2014). Journal of Policy Modeling, Volume 34, Issue 2, March–April 2012, Pages 155-180, FEEM Working Paper No. 25.2014, CMCC Research Paper No. RP0223, Available at SSRN: https://ssrn.com/abstract=2407902

Gabriele Standardi (Contact Author)

Fondazione Eni Enrico Mattei ( email )

Corso Magenta 63
20123 Milan
Italy

Federico Perali

University of Verona - Department of Economics ( email )

via dell'Artigliere, 19
I-37129 Verona
Italy

Luca Pieroni

University of Perugia - Department of Economics ( email )

via Pascoli, 20
PG 06123 Perugia, 06123
Italy

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