trade | MAGNET

Assessing the Impacts of the EU-UK Trade and Cooperation Agreement (TCA) on fisheries and aquaculture

Sat, 26 Nov 2022 00:00:00 +0000

Following the EU-UK Trade and Cooperation Agreement (TCA) entry into force on 1 May 2021, it is important to investigate its potential trade and economic impacts both on the EU and the UK. To make a comprehensive impact analysis, the methodological approach needs to consider the interconnection of fisheries and aquaculture with other actors in the economy. CGE (Computable General Equilibrium) models are appropriate tools to address these needs. This study, commissioned by the European Parliament, applied a CGE model MAGNET to quantify the impact of the TCA on fish related sectors. It was found that TCA is a lose-lose situation to all affected parties and notable welfare losses can be expected due to increased protectionism and misallocation of resources. Parties outside of the EU and the UK, like Norway and Iceland, are expected to increase their trade in FAPs with both the UK and the EU. The overall impacts of the TCA are larger for the UK than the EU, with Ireland being a notable exception. For the EU the main impact is not on the wild fisheries but on the fish processing sector, due to the increased trade costs.

Source: Figure, Impacts of the EU-UK TCA on fisheries and aquaculture in the EU: Trade aspects

The impact on the fish processing sector could be reduced by a removal of the non-necessary non-tariff measures (NTMs) trade cost burdens by for instance providing a mutual recognition of the origin and quality of the fisheries products. As the fish processing sector is most negatively impacted, specific measures to support the EU fish processing industry could be considered. For instance, the Brexit Adjustment Reserve could also incorporate measures to support fish processing businesses. It would be worthwhile to carry out complementary case studies to assess company-level impact of the reduced TACs.

Contact: Heleen Bartelings, Zuzana Smeets Kristkova

MAGNET Analysis of Trade Agreements on EU Agri-Food

Tue, 26 Jan 2021 00:00:00 +0000

Today at the parliament (COMAGRI), Commissioner Wojciechowski will present a report that analyzes the impact of 12 Free Trade Agreements on EU agri-food, based on MAGNET analysis.

According to the new study, the EU trade agenda is set to have an overall positive impact on the EU economy and the agri-food sector. Trade agreements are due to result in substantial increases in EU agri-food exports, with more limited increases in imports, creating a positive trade balance overall. The study also confirms that the EU’s approach to grant a limited amount of lower duty imports (through tariff rate quotas) is the best approach in terms of protecting specific vulnerable agri-food sectors in the EU.

Source: JRC press release

BATMODEL – Better Agri-Food Trade Modelling for Policy Analysis

Sun, 16 Aug 2020 00:00:00 +0000

In the BATMODEL project 15 organizations and research institutes from 10 EU countries cooperate to create better cross-border agricultural trade models than has been the case so far, thus helping decision-makers to achieve better multilateral and regional agreements. As “next generation” trade agreements are not limited to changes in tariffs and tariff quotas and include elements such as growing consumer concerns about food quality and safety or the enforceability of labour market considerations, models used in assessments also need to broaden their scope.

BATMODEL is organized around 7 topic focussed work packages each combing econometric and at least one simulation models included in the project (CAPRI, CGEbox, MAGNET, MIRAGE). The MAGNET team contributes to three of the work packages.

In WP1 (Measuring distributional and sustainability impacts of trade policies) we contribute to an ex-ante framework for well-being assessment, moving away from a consumption-based assessment of trade agreements. As employment changes are key to for distributive impacts this one core topic where a new MAGNET labour market module will be developed. A second core topic is improving an extending SDG indicators linked to food consumption and potential health impacts.

In WP4 (Global value chains) the MAGNET team contributes to an improved database of the increasingly complex international trade network. Standard trade statistic, however, only partially capture this complexity by only registering trade at the border but not its use by sectors or households. Using detail data on trade flows and product characteristics a new GVC database is constructed that better traces the destination of imported commodities thus better capturing global networks. Building on this database a GVC module for MAGNET will be developed to improve assessments of how changes in household demand ripple through the global economy. The new module aims to deliver new indicators on GVCs like the length of production stages and an index of participation in GVCs.

In WP7 (Modelling platform) the MAGNET team contributes to the development of open-source BATMODULES that make the BATMODEL model developments available for wider use. These modules are based on a documentation and coding guideline aiming to improve he model quality as well as transferability of knowledge. Bringing in over more than a decade of experience with modular development we aim to set a practical standard for model enhancements to support cooperation and transfer of knowledge across model teams. The output from WP7 is a series of modules coded in both GAMS and GEMPACK, tested in at least two models and documented such that model teams outside the project can incorporate these enhancements in their own models. Through this BATMODULE platform we aim to make the model enhancements from this project last well beyond the project lifetime.