A Korea-GCC FTA and Its Economic Impact: A CGE Approach
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초록
This paper aims to measure the potential effects of a Korea-GCC FTA using a Computable General Equilibrium (CGE) model. We use the Global Trade Analysis Project (GTAP) model and GTAP database version 9 with aggregated 19 regions and 21 sectors. Our primary objective is to measure the effects of two scenarios of a Korea-GCC FTA on GDP, welfare, total exports, terms of trade, and production by sector. The first scenario is 100 percent cuts of tariffs for the bilateral trade between Korea and the GCC countries. The second scenario is 100 percent cuts of tariffs and an increase in the Total Factor Productivity (TFP) as a result of the FTA. The simulation results show that technological changes have an obvious impact on Korea and the GCC countries. In addition, the FTA has a small effect on the GDP of Korea and the GCC countries. Moreover, Korea gains the most in welfare, followed by the UAE, Saudi Arabia, Kuwait, Qatar, Oman, and Bahrain. Additionally, the FTA has a positive effect on the total bilateral exports for Korea and the GCC countries. Kuwait gains the most in terms of trade followed by Qatar, Oman, the UAE, Saudi Arabia, Bahrain, and Korea. Finally, the FTA motivates the production of Korea's main exporting sectors to the GCC countries (automobiles, transportation equipment, construction products, and metal products), and the GCC countries' main exporting sectors to Korea (oil, gas, and petroleum products).
Abstract
This paper aims to measure the potential effects of a Korea-GCC FTA using a Computable General Equilibrium (CGE) model. We use the Global Trade Analysis Project (GTAP) model and GTAP database version 9 with aggregated 19 regions and 21 sectors. Our primary objective is to measure the effects of two scenarios of a Korea-GCC FTA on GDP, welfare, total exports, terms of trade, and production by sector. The first scenario is 100 percent cuts of tariffs for the bilateral trade between Korea and the GCC countries. The second scenario is 100 percent cuts of tariffs and an increase in the Total Factor Productivity (TFP) as a result of the FTA. The simulation results show that technological changes have an obvious impact on Korea and the GCC countries. In addition, the FTA has a small effect on the GDP of Korea and the GCC countries. Moreover, Korea gains the most in welfare, followed by the UAE, Saudi Arabia, Kuwait, Qatar, Oman, and Bahrain. Additionally, the FTA has a positive effect on the total bilateral exports for Korea and the GCC countries. Kuwait gains the most in terms of trade followed by Qatar, Oman, the UAE, Saudi Arabia, Bahrain, and Korea. Finally, the FTA motivates the production of Korea's main exporting sectors to the GCC countries (automobiles, transportation equipment, construction products, and metal products), and the GCC countries' main exporting sectors to Korea (oil, gas, and petroleum products).
참고문헌 (18)
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