Impact Of Tariff Liberalization Research Articles

Impact of tariff liberalization on economic and social benefits: Computable general equilibrium application to Kenya

AbstractThis study employed computable general equilibrium policy simulations to examine the impact of import tariff liberalization on socioeconomic outcomes including living standards, cost of living, gross domestic product (GDP) from expenditure, total investment expenditure, intermediate input demand, output, value‐added, tariff revenue, sales tax revenue, indirect tax revenue, direct income tax revenue, factor income tax revenue, and factor demand. Findings from the simulations have policy implications touching on a need to embrace reciprocal tariff liberalization under agreements like strategic trade and investment partnerships and economic partnership agreements as they are associated with welfare gains, reduction in cost of living, and GDP growth. Targeted policy incentives could be directed to specific domestic sectors since tariff liberalization has negative impacts on investment expenditure. Incentives regarding intermediate inputs should be directed to the manufacturing and services sectors for liberalization of agrifood commodities. Targeted policy incentives should be directed to the manufacturing and services sectors which experience decrease in output with tariff reductions. Liberalization of manufactured commodities should be accompanied by value‐added incentives directed to the agrifood and home production–home consumption sectors. For the liberalization of manufactured commodities, targeted policy incentives should be directed to the services sector which experiences job losses while for the liberalization of tariffs on imports of agrifood commodities, targeted policy incentives should be directed to the agrifood and the home production–home consumption sectors, which also lose jobs. These targeted policy incentives could support industrial activity and compensate for revenue loss, especially from customs duties.Related ArticlesGruber, Lloyd. 2013. “Trade, Growth, Poverty, and Politics: Toward a Unified Theory.” Politics & Policy 41(5): 723–64. https://doi.org/10.1111/polp.12034.Onyango, Gedion, and Japheth Otieno Ondiek. 2022. “Open Innovation During the COVID‐19 Pandemic Policy Responses in South Africa and Kenya.” Politics & Policy 50(5): 1008–31. https://doi.org/10.1111/polp.12490.Soto, Gloria. 2012. “Environmental Impact of Agricultural Trade Liberalization under NAFTA.” Politics & Policy 40(3): 471–91. https://doi.org/10.1111/j.1747‐1346.2012.00354.x.

Effects of tariff liberalization on the global forest sector: application of the GTAP model

SUMMARY This study investigated the effects of tariff liberalization on the global forest sector by using a computable general equilibrium model, based on the standard Global Trade Analysis Project (GTAP) model and its database, version 5. Tariff liberalization would generally cause only small changes in the terms of trade, real GDP, and the consumption and prices of forest products in most countries. National welfare would increase substantially in Indonesia by more than one billion US dollars in the long run. The prices of forest products would decrease in most countries. The effects of tariff liberalization would also be small on production with few exceptions, for example Indonesia and Malaysia. The major impact of tariff liberalization would be on trade of the developing countries in South America and Asia. Some of the changes in exports or imports of forest products could be more than 50%.

The impact of tariff liberalization between the United States and Mexico: an empirical analysis

A computable general equilibrium (CGE) model of the US is constructed in order to simulate the impact of tariff liberalization between the United State and Mexico following the implementation of the North American Free Trade Agreement (NAFTA). We find that although this agreement will have a minimal effect on the US economy as a whole, certain sectors and regions may experience substantial gain and losses. Overall, however, the treaty should increase economic welfare and enhance economic growth.