Abstract
This study undertakes an empirical investigation of the macroeconomic and sectoral impacts of two forms of regional trade agreements vis-a-vis global trade liberalisation on a small island country, using Fiji as a case study. In order to capture the feed-back effects of such a complex set of policies, we employ a dynamic computable general equilibrium model of the Fijian economy to investigate the impact of the Pacific Island Countries Trade Agreement (PICTA), the impact of PICTA, the Pacific Agreement for Closer Economic Relations (PACER), and the Economic Partnership Agreements (EPAs), the impact of full trade liberalisation, with tariff removal only and, 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 provides the greatest benefits compared to the other scenarios in terms of real output. However, the latter scenario is outperformed by PICTA, PACER, and the EPAs and full trade liberalisation (tariff removal only) in terms of welfare effects, trade volumes and employment. The policy implications hold important lessons for developing countries considering trade liberalisation.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.