María Priscila Ramos Mentor Alessandro Nicita Policymaker Sec Julia Hoppstock Cancillería Argentina Vi seminar on trade and poverty Geneva 810 September ID: 800933
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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
Slide21.
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
Slide31.
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.
Slide41.
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
Slide51.
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
Slide62.
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
Slide72
. 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)
Slide83.
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
Slide93.
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.
Slide103.
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
Slide113. 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
Slide123. 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
Slide134.
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?
Slide144. 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
Slide155
. 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.
Slide165. 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
Slide17Thank
for your attentionComments and questions are welcome!