THE ECONOMICS OF TTIP - WKO.at
Transcript of THE ECONOMICS OF TTIP - WKO.at
THE ECONOMICS OF TTIP
Prof. Gabriel Felbermayr, PhD Ludwig Maximilians Universität München
OeNB
Wien, June 14, 2016
Ifo Center for International Economics
TTIP AGENDA Market access • Tariffs, quota, services, public procurement, … • Numerous exceptions Regulatory cooperation • Unnecessary, discriminatory non-tariff barriers • Sectoral heterogeneity Investment • Access regulation • Protection: ISDS Rules Competition, labor law, data, environment, SMEs, IPR, corruption (?)
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MODELS
? ? ?
CONSENSUS
TTIP EFFECTS: HOW CAPTURED G. Felbermayr 3
Effect often captured
Effect sometimes or partly captured
Effect generally not captured
TTIP
Tariff reductions
(intensive margin)
NTB reductions
(intensive margin)
Extensive margin
Investment
Dynamic productivity
gains
Follow-up trade
liberalization
Tech & knowledge
transfer
Increased domestic market
efficiency
Synergies with other structural reforms
Source: Henn, 2016 (IMF Reference Note).
HOW OLD SCHOOL MODELS FAIL G. Felbermayr 4
Source: Kehoe (2003, 2005). Similar for Europe: Corcos et al. (2012)
NAFTA’s Impact on Openness (percent change in trade/GDP ratios)
TTIP: THE TRAGEDY OF NUMBERS G. Felbermayr 5
The profession has failed to convey its message
Forecast • In an ex ante analysis? • NTBs: bottom-up, narrow • Small, but realistic?
Potential • NTBs: top-down, broad • TTIP not comparable? • Large, but unrealistic?
Micro • RoOs not captured • No extensive margin • Realistic ?
Macro • RoOs: maximum strength • Extensive margin • Unrealistic?
Calibrated • Parameters from various
sources • Scenario: expert-driven
Estimated • Full integration of theory,
estimation, and scenario definition
CEPR ifo-BM, KOF, …
ESTIMATES OF TTIP‘s IMPACT G. Felbermayr 6
Source: Felbermayr, 2016.
% of baseline real GDP/capita
CEPR / WTI
USA 0.4 EU 0.5 Austria 0.4 Germany 0.6 France 0.3 UK 0.4
Non-TTIP 0.1 Indonesia 0.9 China 0.0
World 0.3
ESTIMATES OF TTIP‘s IMPACT G. Felbermayr 7
Source: Felbermayr, 2016.
% of baseline real GDP/capita
CEPR / WTI Aichele et al. (2014)
USA 0.4 2.7 EU 0.5 2.1 Austria 0.4 2.4 Germany 0.6 2.6 France 0.3 2.2 UK 0.4 2.3
Non-TTIP 0.1 0.4 Indonesia 0.9 -0.1 China 0.0 -0.3
World 0.3 1.3
ESTIMATES OF TTIP‘s IMPACT G. Felbermayr 8
Source: Felbermayr, 2016.
% of baseline real GDP/capita
CEPR / WTI Aichele et al. (2014)
Egger et al. (2015)
USA 0.4 2.7 1.0 EU 0.5 2.1 2.3 Austria 0.4 2.4 Germany 0.6 2.6 1.4 France 0.3 2.2 1.3 UK 0.4 2.3 1.8
Non-TTIP 0.1 0.4 Indonesia 0.9 -0.1 0.4 China 0.0 -0.3 -0.3
World 0.3 1.3
ESTIMATES OF TTIP‘s IMPACT G. Felbermayr 9
Source: Felbermayr, 2016.
% of baseline real GDP/capita
CEPR / WTI Aichele et al. (2014)
Egger et al. (2015)
ifo-BM / Felbermayr et al. (2015)
USA 0.4 2.7 1.0 4.9 EU 0.5 2.1 2.3 3.9 Austria 0.4 2.4 2.8 Germany 0.6 2.6 1.4 3.5 France 0.3 2.2 1.3 3.5 UK 0.4 2.3 1.8 5.1
Non-TTIP 0.1 0.4 -0.9 Indonesia 0.9 -0.1 0.4 -0.1 China 0.0 -0.3 -0.3 -0.5
World 0.3 1.3 1.6
Source: ifo 2, Aichele et al., 2014.
Positive net global effects
+2,7% +2,1%
Ø Non-TTIP: -0,03%
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ESTIMATES OF TTIP‘s IMPACT
G. Felbermayr 11
GROWTH VERSUS LEVEL EFFECTS How DIHK and BDI got the interpretation wrong
Source: WTI (2016).
Real per capita income CPI
0.6 0.3
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WHO UNDERSTANDS THE NUMERAIRE CGE Models: only relative prices matter. TTIP not inflationary!
Ifo Institut
• Ifo assumes an overoptimistic scenario. WRONG. The scenario is benchmarked to the average of other agreements and describes, by construction, feasible potentials. • Because current US-EU trade is low, welfare gains from TTIP cannot
be large. WRONG. In all trade models, initial trade volumes correlate negatively with the size of potential gains from trade. • The size of ifo gains is implausibly high. WRONG. Modern data-based research attributes the gains from trade for Germany at 30-50%. • Bilateral trade effects are inconsistent with the welfare effects. WRONG. What matters for welfare is not the value (price x quantity) of trade flows, but alone quantity and quality.
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MORE MISUNDERSTANDINGS
Ifo Institut 14
AND WHAT THE DISPUTE PRODUCED …
Source: November 18, 2014 by Russia Today