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Repealing NAFTA: The impact on international trade with focus on Mexico
Kolář, Daniel ; Semerák, Vilém (advisor) ; Cazachevici, Alina (referee)
The North American Free Trade Agreement came into force in 1994 after long and emotive discussions. When Donald Trump became the US president in 2016, its future became uncertain, which motivates this paper to attempt to quantify the impact of its repeal. To do that, it uses a standard GTAP general equilibrium model and models an increase of intra-NAFTA tariffs to the derived MFN rates. It finds that NAFTA repeal would notably reduce intra-NAFTA trade and have a modest but negative impact on countries' welfare. NAFTA repeal is estimated to decrease Canadian GDP by 0.48%, US GDP by 0.39% and Mexican GDP by 0.06%. It would severely damage US-Mexico value chains and increase income inequality in Mexico by hurting unskilled workers more. Additional simulations are performed to control for variation in sectoral MFN rates and to observe the sensitivity of results to the choice of closure. The only positive of NAFTA repeal is that it might mitigate regional economic disparities in Mexico by damaging sectors concentrating their production near the US-Mexico border. 1
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Repealing NAFTA: The impact on international trade with focus on Mexico
Kolář, Daniel ; Semerák, Vilém (advisor) ; Cazachevici, Alina (referee)
The North American Free Trade Agreement came into force in 1994 after long and emotive discussions. When Donald Trump became the US president in 2016, its future became uncertain, which motivates this paper to attempt to quantify the impact of its repeal. To do that, it uses a standard GTAP general equilibrium model and models an increase of intra-NAFTA tariffs to the derived MFN rates. It finds that NAFTA repeal would notably reduce intra-NAFTA trade and have a modest but negative impact on countries' welfare. NAFTA repeal is estimated to decrease Canadian GDP by 0.48%, US GDP by 0.39% and Mexican GDP by 0.06%. It would severely damage US-Mexico value chains and increase income inequality in Mexico by hurting unskilled workers more. Additional simulations are performed to control for variation in sectoral MFN rates and to observe the sensitivity of results to the choice of closure. The only positive of NAFTA repeal is that it might mitigate regional economic disparities in Mexico by damaging sectors concentrating their production near the US-Mexico border. 1
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Czech and Chinese Trade Relationships: Evaluation and Impact
Jakab, Miroslav ; Semerák, Vilém (advisor) ; Cazachevici, Alina (referee)
Czech and Chinese Trade Relationships: Evaluation and Impact Miroslav Jakab Abstract The focus of this work is an analysis of the economic relationships between the Czech Republic and China. This is done by calculating indirect trade flow estimates from national input-output tables to provide a full picture of the trade relations. A Computable General Equilibrium (CGE) model is then used in order to evaluate the interconnectedness of the two economies based. The findings reveal a picture of relatively low influence concerning general welfare changes, which can nevertheless bring benefit or loss to particular industries involved.
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