Impact Assessment of Thailand FTA

1. Impact Assessment of Thailand FTA KAMEYAMAHiroshi,Tawan BOOTSUMRAN Associate Prof. and Master student, Faculty of Agriculture, Kagawa University E-mail:kameyama@ag.kagawa-u.ac.jp index for assessment a. equivalent variation (EV) The welfare change measurement in GTAP, million US$, a money metric equivalent of this utility change and any change in population. The regional household’s EV, resulting from a policy shock, is equal to the difference between the expenditure required to obtain the new level of utility at initial expenditure.[2] b.Real GDP (qgdp) quantity index of GDP (gross domestic product), % changes c. terms of trade (tot) The price of exports relative to the price of imports,% change. TOT improvement reduces the price of total domestic final expenditure (which includes imports but not exports) relative to the market price of output (which includes exports but not imports). Abstract: This study addresses the economic assessment of the impacts of Thailand Free Trade Agreement (FTA) and trade liberalization between Thailand and regional countries quantitatively. Thailand will be in a good position to perform a gratifying consequences and entirely advantage from FTA. I. INTRODUCTION Thailand and Japan reached a general accord for an economics partnership agreement (EPA) in 2005. The free trade agreement (FTA) reduces barries on more than US$40 billion trade. It is also expected to help increase cross-country investment and technology transfer/ Japan is Thailand’s single largest trading partner and investor, and Thailand is a leading exporter and supplier of a number of food, raw materials and finished products to Japan[1]. II. GTAP MODEL and the TRADE POLICY SIMULATION The analysis is based on a Computable General Equilibrium (CGE) model of global trade. For performing GE analysis, GTAP model (version 6, 2005) was employed. This database provides input-output table with 87 regions and 57 commodities and bilateral trade. We aggregate it into 20-regions; 11-setors; and 5-factors.The data of each country in this model corresponds to the global economy in 2001. Trade impact inASEAN % change Note:1. policy simulation is eliminating the Import Tariff among ASEAN countries. 2.Values are the % change of VIMS (Trade- Bilateral imports at market prices ). 3. In case of ALL1 scenario as follows. IV. RESULT Thailand will be in a good position to perform a gratifying consequence, and entirely advance from FTA. III. IMPACT ASSESSMENT by SIMULATION Four scenarios a. with and without sensitive goods (Processed rice, Sugar), b. armington trade substitution elasticities, standard or doubled zero tariff (import tax) armington elasticity ALL1 all commodity standard ALL2 all commodity doubled SEN1 without sensitive commodity standard SEN2 without sensitive commodity doubled Reference: [3] References [1] Suthiphand Chirathivat, “Japan-Thailand EPA: Problems and Future”, working paper No.5, Center for Contemporary Asian Studies (CCAS) Doshisha Univ., Japan, May 2007. [2] Karen M. Huff and Thomas W. Hertel, “Decomposing Welfare Changes in the GTAP Model”, GTAP technical paper No. 5. January 2000. [3] Kawasaki K. “GTAP model analysis, Japan-Thailand FTA and Japan-Korea FTA, edited by Suzuki N.“FTA and Food”, Tsukuba Shobou, 2005 (Japanese).