IDEAS home Printed from https://ideas.repec.org/a/sae/fortra/v51y2016i1p46-80.html
   My bibliography  Save this article

Mega External Preferential Trade Agreements and Their Impacts on Indian Economy

Author

Listed:
  • A. Ganesh-Kumar
  • Tirtha Chatterjee

Abstract

This study examines the impacts on India of three mega external preferential trading agreements (PTAs) from which the country is excluded using the Global Trade Analysis Project (GTAP) model combined with POVCAL poverty analysis tool. The simulation results show that each of these PTAs cause considerable trade diversion. However, the impacts on India’s trade flows, domestic output, returns to factors, aggregate welfare, inequality and poverty levels are rather small. In contrast, multilateral trade liberalization has significantly large and favourable impacts on all these variables. In particular, welfare improves by 1.7 per cent of GDP, inequality falls by over half percentage point and poverty head count lowers by 12.3 per cent over base levels under a multilateral free trade scenario. These results suggest that the country should continue with its efforts for achieving a multilateral trade agreement. At the same time, the country should hedge against the possibility that a global trade agreement does not materialize. One way to protect the country’s interest is to aggressively pursue preferential trading arrangements in parallel with key members of these three mega PTAs. This is likely to ensure that the country does not lose market share due to preference erosion.

Suggested Citation

  • A. Ganesh-Kumar & Tirtha Chatterjee, 2016. "Mega External Preferential Trade Agreements and Their Impacts on Indian Economy," Foreign Trade Review, , vol. 51(1), pages 46-80, February.
    • Handle: RePEc:sae:fortra:v:51:y:2016:i:1:p:46-80
    DOI: 10.1177/0015732515616545
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/0015732515616545
    Download Restriction: no
    File URL: https://libkey.io/10.1177/0015732515616545?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Robinson, Sherman & Thierfelder, Karen, 2002. "Trade liberalisation and regional integration: the search for large numbers," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 46(4), pages 1-20.
    2. Datt, Gaurav, 1998. "Computational tools for poverty measurement and analysis," FCND discussion papers 50, International Food Policy Research Institute (IFPRI).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Himanshu Jaiswal & A. Ganesh Kumar, 2024. "A New mechanism for trade agreements to revitalize the global value chains," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2024-001, Indira Gandhi Institute of Development Research, Mumbai, India.
    2. Muhammad Aamir Khan & Naseeb Zada & Kakali Mukhopadhyay, 2018. "Economic implications of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) on Pakistan: a CGE approach," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 7(1), pages 1-20, December.
    3. World Bank, "undated". "South Asia Economic Focus, Spring 2017," World Bank Publications - Reports 26373, The World Bank Group.
    4. Avijit Mandal, 2019. "Welfare Effect of Free Trade Agreements: A Theoretical Note," Foreign Trade Review, , vol. 54(2), pages 115-125, May.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Francois, Joseph & Rojas-Romagosa, Hugo, 2005. "The Construction and Interpretation of Combined Cross-Section and Time-Series Inequality Datasets," CEPR Discussion Papers 5214, C.E.P.R. Discussion Papers.
    2. Gumilang, Howard & Mukhopadhyay, Kakali & Thomassin, Paul J., 2011. "Economic and environmental impacts of trade liberalization: The case of Indonesia," Economic Modelling, Elsevier, vol. 28(3), pages 1030-1041, May.
    3. Xiao-guang Zhang & George Verikios, 2006. "Providing Duty-Free Access to Australian Markets for Least-Developed COuntries: a General Equilibrium Analysis," Economics Discussion / Working Papers 06-09, The University of Western Australia, Department of Economics.
    4. Camelia Minoiu & Sanjay Reddy, 2014. "Kernel density estimation on grouped data: the case of poverty assessment," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 12(2), pages 163-189, June.
    5. Abdelhamid EL BOUHADI & Abdelkader ELKHIDER & El Mustapha KCHIRID, 2010. "Can Economic Growth Be Pro-Poor In Morocco?. The No-Monetary Approach," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 10(2).
    6. Masato Okamoto, 2014. "Interpolating the Lorenz Curve: Methods to Preserve Shape and Remain Consistent with the Concentration Curves for Components," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 60(2), pages 349-384, June.
    7. Li, Jennifer Chung-I, 2003. "A Dynamic Recursive Analysis of A Carbon Tax Including Local Health Feedback," Conference papers 331085, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    8. Hala Abou-Ali & Hesham El-Azony & Heba El-Laithy & Jonathan Haughton & Shahid Khandker, 2010. "Evaluating the impact of Egyptian Social Fund for Development programmes," Journal of Development Effectiveness, Taylor & Francis Journals, vol. 2(4), pages 521-555.
    9. Anne O. Krueger, 1999. "Are Preferential Trading Arrangements Trade-Liberalizing or Protectionist?," Journal of Economic Perspectives, American Economic Association, vol. 13(4), pages 105-124, Fall.
    10. A. Ganesh Kumar & Gordhan Kumar Saini, 2007. "Economic co-operation in South Asia: The Dilemma of SAFTA and beyond," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2007-017, Indira Gandhi Institute of Development Research, Mumbai, India.
    11. Tokarick, Stephen, 2011. "Should Countries Worry About Immiserizing Growth?," Conference papers 332133, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    12. Diao, Xinshen & Diaz-Bonilla, Eugenio & Robinson, Sherman & Orden, David, 2005. "Tell me where it hurts, an' I'll tell you who to call," MTID discussion papers 84, International Food Policy Research Institute (IFPRI).
    13. Harpaul Alberto Kohli & Y. Aaron Szyf & Drew Arnold, 2012. "Construction and Analysis of a Global GDP Growth Model for 185 Countries through 2050," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 4(2), pages 91-153, May.
    14. Robinson, Sherman & Thierfelder, Karen, 2019. "Global adjustment to US disengagement from the world trading system," Journal of Policy Modeling, Elsevier, vol. 41(3), pages 522-536.
    15. Alpay, Savas, 2003. "How Can Trade Liberalization Be Conducive to a Better Environment?," Conference papers 331113, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    16. Renuka Mahadevan & John Asafu-Adjaye, 2013. "Unilateral Liberalisation or Trade Agreements: Which Way Forward for the Pacific?," The World Economy, Wiley Blackwell, vol. 36(10), pages 1355-1372, October.
    17. Patrick GUILLAUMONT, 2009. "Aid effectiveness for poverty reduction: macroeconomic overview and emerging issues," Working Papers P05, FERDI.
    18. Lee, Hiro, 2001. "General equilibrium evaluation of Japan-Singapore free trade agreement," MPRA Paper 82605, University Library of Munich, Germany.
    19. Susanto, Dwi & Rosson, C. Parr & Adcock, Flynn J., 2007. "Trade Creation and Trade Diversion in the North American Free Trade Agreement: The Case of the Agricultural Sector," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 39(1), pages 121-134, April.
    20. Charteris, Angus & Winchester, Niven, 2010. "Dairy disaggregation and joint production in an economy-wide model," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 54(4), pages 1-17.

    More about this item

    Keywords

    Trade policy; preferential trade agreements; poverty; computable general equilibrium;
    All these keywords.

    JEL classification:

    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:fortra:v:51:y:2016:i:1:p:46-80. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.