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TTIP – Potential Effects on Norway

Author

Listed:
  • Gabriel Felbermayr
  • Rahel Aichele
  • Inga Heiland
  • Arne Melchior
  • Marina Steininger

Abstract

The currently negotiated Transatlantic Trade and Investment Partnership between the EU and the United States of America will most likely affect countries, such as Norway which have close ties to the European production networks. Based on a CGE model, developed at the ifo institute, we structurally estimate the potential effects of TTIP for Norway’s economy on sectoral level. The model captures the reality of global value chains and provides a multi-country multi-sector approach with rich intra- and international input-output linkages. The analysis shows that trade diversion and trade creation effects offset each other in Norway. A comprehensive agreement between the EU and the US would lead to an increase in Norwegian GDP per capita by 0.05%. However, the gain is entirely driven by positive value added changes in the energy sector. Without these gains, the aggregate effects would turn into a loss of -0.11% of current GDP.

Suggested Citation

  • Gabriel Felbermayr & Rahel Aichele & Inga Heiland & Arne Melchior & Marina Steininger, 2016. "TTIP – Potential Effects on Norway," ifo Working Paper Series 228, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    • Handle: RePEc:ces:ifowps:_228
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    References listed on IDEAS

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    1. Gabriel Felbermayr & Benedikt Heid & Mario Larch & Erdal Yalcin, 2015. "Macroeconomic potentials of transatlantic free trade: a high resolution perspective for Europe and the world," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 30(83), pages 491-537.
    2. Dai, Mian & Yotov, Yoto V. & Zylkin, Thomas, 2014. "On the trade-diversion effects of free trade agreements," Economics Letters, Elsevier, vol. 122(2), pages 321-325.
    3. Olivier Cadot & Julien Gourdon, 2016. "Non-tariff measures, preferential trade agreements, and prices: new evidence," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 152(2), pages 227-249, May.
    4. Olivier Cadot & Julien Gourdon, 2016. "Non-tariff measures, preferential trade agreements, and prices: new evidence," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 152(2), pages 227-249, May.
    5. Fontagné, Lionel & Guillin, Amélie & Mitaritonna, Cristina, 2010. "Estimations of Tariff Equivalents for the Services Sectors," Conference papers 331941, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    6. Lorenzo Caliendo & Fernando Parro, 2015. "Estimates of the Trade and Welfare Effects of NAFTA," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 82(1), pages 1-44.
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