ImpactECON report on the impacts of reversing NAFTA was cited in the Wall Street Journal on Monday, October 16, 2017.

As concerns rise about the demise of the new NAFTA negotiations, the Wall Street Journal, CNBC, CNN and the New York Times have cited ImpactECON’s working paper “Reversing NAFTA: A Supply Chain Perspective“. Here we try to answer a few recently asked questions.

Questions and Answers on the Impact of Reversing NAFTA

What is the impact of reversing NAFTA on the US economy?

Real GDP is estimated to decline by 0.09 percent in the next 2-3 years. Investment is estimated to decline by 1 percent, which means that growth will fall further in the long run.

What is the estimated impact of reversing NAFTA on US employment?

US employment is estimated to decline by 256,000, with many more workers having to relocate to other industries to find jobs. This figure assumes that skilled workers are willing to accept a decline in their wages, if not then US employment could decline by over 1,000,000.

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ImpactECON announces a new working paper that examines the impact of reversing NAFTA on supply chains and employment using the ImpactECON supply chain database and model.

In July, the USTR announced that the first round of new negotiations on NAFTA will take place between the US, Canada and Mexico on August 16-20, 2017. USTR also released their negotiation objectives.

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Terrie Walmsley and Peter Minor presented “Supply Chains and Tariff Rates: The Impact of Reversing NAFTA” at the USITC on Thursday, February 23.

Since the North-American Free Trade Agreement (NAFTA) entered into force in 1994, production within the three NAFTA countries has become more specialized as foreign direct investment and trade have been allowed to thrive and firms have taken advantage of economies of scale and lower wages in Mexico. Extensive regional supply chains for producing motor vehicles, chemicals, wearing apparel, among other commodities have emerged. Continue reading →

ImpactECON announces several new videos examining the Global Supply Chain database and modeling framework.

In the series of videos, a simple trade liberalization shock is implemented on automobiles exported from Japan to Germany using both the GTAP model and the ImpactECON global supply chain model and the results compared. The analysis shows some surprising differences between the two models, and in particular the impact of the trade liberalization on Germany’s domestic production of motor vehicles.

For more information on the ImpactECON global supply chain package, please visit the ImpactECON store.

ImpactECON announces its new Global Supply Chain database and model, along with new labor quantities and updates to the MyGTAP modelling framework. The new products can be used with the GTAP 9a Data Base and can be purchased through the ImpactECON store. Continue reading →

ImpactECON Director, Dr. Walmsley presented a paper outlining a new willingness to pay method at the 19th Annual Conference on Global Economic Analysis hosted by the World Bank. The new method was incorporated into a global supply chain model and contrasted with the traditional iceberg method used for examining non-tariff measures. The new willingness to pay method results in larger gains to trade and increased prices through an increase in demand, while the iceberg effect lowers prices through a productivity gain. The new willingness to pay method is documented in working paper #04 of the ImpactECON working paper series.

ImpactECON Director, Dr. Walmsley, presented at the Third High-Level Meeting on Country-Led Knowledge Sharing, held at the World Bank, March 30-31 2016, Washington, DC.

For more information on the event.

ImpactECON, with Copenhagen Economics, was awarded a European Parliament framework contract, for: “Impact Assessment and European Added Value: Development and International Trade Economics.” Award number: EPRS/IMPT/SER/14/013.

ImpactECON introduces new working paper series focused on adapting, testing and transitioning academic work for practical, real world use. The end goal is to improve CGE modeling with emphasis on policy and investment analysis through improvements to data and modeling constructs. Working papers on the MyGTAP model, capital-labor substitution, modeling willingness to pay and the GTAP data base can be found under resources.

Analysis for New Zealand’s Ministry of Foreign Affairs and Trade (MFAT) examines benefits of Trans-Pacific Partnership program for New Zealand and partner economies. The analysis was done in partnership with New Zealand researchers Anna Strutt, University of Waikato, and Allen Rae, Massey University.

• Read MFAT’s summary of the TPP here: MFAT New Zealand Summary of TPP.
• Download original modeling report from MFAT: Economic modeling of TPP MFAT
• or download the report directly from our web page: MFAT Trans-Pacific Partnership Report