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The impact of trade liberalization of environmental products on welfare, trade, and the The impact of trade liberalization of environmental products on welfare, trade, and the

The impact of trade liberalization of environmental products on welfare, trade, and the - PowerPoint Presentation

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The impact of trade liberalization of environmental products on welfare, trade, and the - PPT Presentation

María Priscila Ramos Mentor Alessandro Nicita Policymaker Sec Julia Hoppstock Cancillería Argentina Vi seminar on trade and poverty Geneva 810 September ID: 800933

egs trade argentina list trade egs list argentina unctad cont welfare japan epp approach lists countries developing oecd emissions

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Slide1

The impact of trade liberalization of environmental products on welfare, trade, and the environment in Argentina

María Priscila Ramos Mentor: Alessandro NicitaPolicymaker: Sec. Julia Hoppstock (Cancillería Argentina) Vi seminar on trade and poverty, Geneva, 8-10 September 2014

Slide2

1.

MotivationEGS trade liberalization negotiationsTriple win objective for development, trade and the environment.Main questions under discussion: EGS definitionApproaches: The list approach vs. other approachesTrade liberalization modalities: SDT for developing countries?

Why are these negotiations important to Argentina?

The

list

approach

Other

approaches

The

OECD

list

The

environmental

project

approach

The

APEC

list

The

request-offer

approach

The

Japan

list

The

integrated

approach

The

UNCTAD-EPP

list

The

combined

approach

The

hybrid

approach

Slide3

1.

Motivation (cont.)Potential increase in EGS Argentina’s trade

Export Pattern of EGS for Argentina

Concentration of Argentina’s EGS trade

Source

: MAcMap-HS6

database

, CEPII.

Slide4

1.

Motivation (cont.) Protection patterns of EGS

Source

: MAcMap-HS6

database

, CEPII.

Ad valorem equivalent applied

protection

OECD

list

APEC

list

Japan

list

UNCTAD-EPP list

Argentina

8.61

6.47

27.39

7.99

Slide5

1.

Objective (cont.)How do we address these questions?1) To evaluate the effects of the elimination of multilateral bound tariffs according to

each four EGS lists (APEC, Japan, OECD, UNCTAD-EPP) on Argentina:trade, welfare and its distribution across urban households andthe

environment (CO2 emissions)2) To provide policy recommendation to identify EGS and modalities

that would improve gains for Argentina and other developing countries

Slide6

2.

Two-step methodologyGTAP 7.1MAcMap-HS-6(15r, 39s)

Aggregate Welfare

Trade (total, bilateral and by sector)CO2

emissions

ENGH 1996-1997

(7g)

Welfare

(

consumption

and

wage

effects

)

Distribution

of real

income

changes

Tables

of

correspondences

Slide7

2

. Two-step methodology (cont.)Simulated EGS ScenariosMultilateral bound tariff

elimination on EGS according to:The list

approach with 4 alternative lists: OECD

APEC,

Japan

,

UNCTAD-

EPPs

Under

two

different

tariff phase-out

modalities:Without SDT provisions for developing

countriesWith deferred

tariff reductions by 5 years for

developing

countries

(

SDT)

Slide8

3.

FindingsA) Trade ResultsArgentina’s trade in per cent

change compared to the baseline (2030)

BUT bilateral trade and

sectoral

trade differs across the EGS lists

AL

L

TRADE

UNCTADTOT

Slide9

3.

Findings (cont.)Changes in the Argentina’s trade at the region and sector levels

The Japan list

Increases with Japan (19.73% M and 7% X) and other

less

traditional

partners

, and

f

alls

with

Brazil (-8% M and X).Export

diversification: increase across

sectors.Imports fall

in all sectors except Transport

,

Communication

and

Housing

(5.5%)

being the most affected by competition.The UNCTAD-EPP listIncrease with other developing countries (e.g. India, 1.4% M and 14.2% X).Export concentration: increase only in Clothing and Food & Beverages.Import diversificaction: increase across sectors intensifying competition for local producers.

Slide10

3.

Findings (cont.)B) Welfare resultsArgentina’s welfare per cent change

compared to the baseline (2030)

TOT

APEC and OECD

All.Eff

.

a

nd I J

APAN

TOT

UNCTAD EPP

Slide11

3. Findings(cont.)

Distribution of household welfare

(a) Wage welfare effect(

b) Consumption welfare effect

Small

prices

changes

and

small

consumption

effects

Greater

wage

effect

=

Japan

Fairer

wage effect = UNCTAD-EPP

Slide12

3. Findings(cont.)

C) Environmental results

Global CO

2

emissions

increase

under

all

scenarios

Argentina CO

2

emissions only reduce under the OECD and the UNCTAD-EPP lists

Slide13

4.

Policy recommendations None of the four lists leads to a global triple-win situation.To Argentina:If the list approach is retained,

Lists/ScenariosDevelopment

TradeEnvironmentWelfare

Income Distribution

CO2 emissions

1

UNCTAD-EPP

++

Neutral

++

-

2

Japan

+

Pro-rich

+

+

How could another EGS

proposal

enhance the

Argentina triple-win

situation?

Slide14

4. Policy recommendations

(cont.)Non-list approaches suggest: To differentiate EGS lists across WTO membersRanking EGS based on common trade, development and environmental criteriaTo allow for more flexibility in EGS market accessLower cuts and/or longer phase out period -> Only slight improvement to Argentina under the Japan list

To assess other modalities for EGS tariff cuts (e.g. TRQs)To provide technological and financial transfers to facilitate adoption of environmental-friendly technologies and practices

SDT provisions for developing countries

Slide15

5

. Final Remarks Main conclusions of this workPreferred scenarios to Argentina: The UNCTAD-EPP and the Japanese lists BUT with quantitative and composition differences between them.Potential three-fold gains lie in the details: EGS coverage, trade liberalization modalities and the treatment of countries differences.

Greater gains to Argentina and other developing countries are subject to the implementation of SDT provisions.

Slide16

5. Final Remarks

(cont.)Methodological limitations of this workData: Imperfect correspondence and aggregationModeling assumptions: No extensive margin of tradeFull employment of resourcesCO2 emissions caused exclusively by fuel energy consumption How can we improve

proposals to be close to a triple

win situation? To identify of common (trade, development and environmental) criteria to define the Argentina’s EGS list

To evaluate different EGS trade liberalization modalities

To provide financial aids and technological transfers to countries with lower level of development

Slide17

Thank

for your attentionComments and questions are welcome!