Tom Kompas and ANU colleagues have built the first large scale model with inter-temporal rules (how decisions at one point in time shape future circumstances), which countries can use to assess the decades-long impact of free trade deals. “Since our model is inter-temporal, producer and consumer behaviour is optimised in the long-run, thus enabling us to simulate, in particular, producers’ anticipation of future tariff reductions, taking into account future investment decision in advance,” they write
They tested the model for Vietnam in a free-trade scenario, using the Trans Pacific Partnership agreement and found, “Vietnam gains considerably from the TPP, with 50% of the gains realised within the first ten years despite our assumption of a gradual and linear removal of trade barriers.”
All good, even better the model is universal – plug in the data and get results for country of choice. Professor Kompas says the model, published in journal Economic Modelling is available free for the next 50 day.
PhamVan Ha, Tom Kompas, Hoa Thi Minh Nguyen and Chu Hoang Long (all Crawford School of Public Policy @ ANU), “Building a better trade model to determine local effects: A regional and intertemporal GTAP model,” Economic Modelling, 67 (December 2017) 102-113