The Trade Liberalization Evaluation (TLE) Methodology

Abstract

This research paper proposes a new trade analysis model to evaluate the trend and stages of trade liberalization of any country. This new trade analysis model is entitled “The Trade Liberalization Evaluation (TLE) Methodology.” The TLE Methodology will introduce new indexes and graphs.There are four basic phases in the implementation of TLE Methodology. The first phase is the design of the multi-input tariff database table by production sector (agriculture, heavy industry, 1 1 Heavy industry realizes to use intensive Capital (K) factor into its production process. light industry 2 2 Light industry realizes to use intensive Labor (L) factor into its production process. and services). The second is the measuring of the Trade Liberalization Index by Production Sector (X i), it is divided by the Agriculture Trade Liberalization Index (X1), Heavy Industry Trade Liberalization Index (X2), Light Industry Trade Liberalization Index (X3), and Services Trade Liberalization Index (X4). The third phase is the measurement of the Area of Coverage of the Trade Liberalization (ACTL) index. The last phase is the measuring of the Trade Liberalization Stage (LTS) index. The general objective of TLE Methodology is to offer policy-makers and researchers a new analytical tool to study the trade liberalization trend and stages of any country from a global perspective—based on a group of indexes and graphs. The TLE Methodology is not intended to be a forecasting model in any case. However, its application is not limited to the study of a special group of countries or regions. It is not constrained by issues about the region or the development stages of any country in a region that is interested in integrating into a Free Trade Area. TLE Methodology, in effect, is a simple and flexible scheme, which can be applied to any case of trade liberalization.