Trade Policy Analysis at a Sub-National Level: Replacing Canada by Its Provinces in the GTAP Model

14 Pages Posted: 16 Apr 2015  

Dmitry Lysenko

Nova Scotia government

Dan Ciuriak

Ciuriak Consulting Inc.; C.D. Howe Institute; Centre for International Governance Innovation (CIGI); BKP Development Research & Consulting GmbH

Jingliang Xiao

Infinite Sum Modeling; Ciuriak Consulting Inc.

Date Written: April 14, 2015

Abstract

This paper develops a new version of the GTAP database in which Canada is replaced by its provinces in order to allow the analysis of international trade agreements at a subnational level. The methodology in effect treats the individual provinces as separate trading entities, much like the individual Member States within the European Union, with common external trade barriers and minimal internal trade barriers. We document the procedure to develop this dataset and apply it in a demonstration simulation of the Canada-EU Comprehensive Economic and Trade Agreement. While we emphasize the naïve nature of the policy shock used to demonstrate the model – full tariff elimination and non-tariff factors not taken into account – the overall impact of the CETA appears to be reasonable both in terms of scale and in terms of sectoral impacts. Importantly, the results demonstrate that Canada’s provinces are affected very differently by a preferential trade agreement where geography and sectoral specialization favour some and disfavour others

Keywords: CGE model, GTAP, sub-national impact, provincial trade, trade policy, Canada

JEL Classification: F14, F15, F17

Suggested Citation

Lysenko, Dmitry and Ciuriak, Dan and Xiao, Jingliang, Trade Policy Analysis at a Sub-National Level: Replacing Canada by Its Provinces in the GTAP Model (April 14, 2015). Available at SSRN: https://ssrn.com/abstract=2594581 or http://dx.doi.org/10.2139/ssrn.2594581

Dmitry Lysenko

Nova Scotia government ( email )

Canada

Dan Ciuriak (Contact Author)

Ciuriak Consulting Inc. ( email )

83 Stewart St.
Ottawa, Ontario K1N 6H9
Canada

C.D. Howe Institute ( email )

67 Yonge St., Suite 300
Toronto, Ontario M5E 1J8
Canada

Centre for International Governance Innovation (CIGI) ( email )

57 Erb Street West
Waterloo, Ontario N2L 6C2
Canada

BKP Development Research & Consulting GmbH ( email )

Romanstrasse 74
München, 80639
Germany

Jingliang Xiao

Infinite Sum Modeling ( email )

16167,Glenbrooks Pl
Vancouver, BC - British Columbia v4n1t3
Canada
6047245981 (Phone)
6047245981 (Fax)

HOME PAGE: http://www.infsum.com/en/

Ciuriak Consulting Inc. ( email )

83 Stewart St.
Ottawa, Ontario K1N 6H9
Canada

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