UNCTAD Virtual Institute
International Trade Centre
World Trade Organization
United Nations Conference on Trade and Development

Workshop on Tools and Methods for Trade and Trade Policy Analysis
Geneva, 11-15 September, 2006


The ability to conduct meaningful analysis of trade and investment issues is essential for developing countries to be able to shape their own policies at a national level, as well as in regional and international negotiating fora.

This CD-Rom is the result of a week-long workshop held in Geneva from the 11 th - 15 th September 2006 aimed at researchers and teachers in academia and other knowledge institutions. The workshop, attended by 21 researchers and teachers from 17 countries, brought together expertise from UNCTAD, the WTO and the ITC in the use of econometric and simulation tools, and methodologies for policy-oriented trade research.

In addition, an open dialogue was held with policy makers on how to enhance the links between researchers and governments and how to better communicate research results.

The objectives of the workshop were:

  • to familiarize participants with sources of data on trade and trade policy
  • to present and train them on methodologies for trade and trade policy analysis
  • to discuss ways of integrating such analyses into university programmes
  • to discuss with policy makers how to present research
  • to identify areas of research that could be developed using the techniques and data presented in the workshop



About the Virtual Institute:

UNCTAD Virtual Institute on Trade and Development

Virtual Institute associate membership and website

 


Related documents:


Video specials:

Research-based information for trade policy making: choosing the
appropriate methodology
- Sam Laird, UNCTAD Principal Trade Expert (Retired)

Linking research with policy-making

* Please install this media player to view the videos above.

Workshop sessions


> Trade Policy Research Methodologies

The design of trade policies may require a considerable amount of information. Policy makers will need in the first place a diagnostic of the trade regime and an assessment of the trade performance of a country. To be able to take informed decisions on trade policies, decision-makers will also require information on the efficiency and growth impact of envisaged trade policies. At the same time, they may as well request information on the short and long run distributional effects of trade policies. Academics performing applied research are in the position to provide some of the required analysis. Close cooperation with policy makers during the definition of research questions can contribute to making the research relevant to the country's trade policy-making. Once the research question is identified, the most adequate methodology has to be chosen. The main criteria in this process are the nature of the question and the assumptions behind specific methodologies as well as the data requirements and constraints, such as resource costs.

The resources provided give an insight into possible research questions and discusses the advantages and weaknesses of different methodologies.

> Trade Data Tools

Understanding a country's existing market access conditions and possible tariff changes as a result of trade negotiations is essential for the private and public sector alike. You can find under this link different trade data sources and information about their use: Market Access Map (www.macmap.org) provides a comprehensive source of customs tariffs and trade data from 178 countries, which can be used, for example, to analyse tariffs applied to specific products, protection rates, or to simulate the effect of tariff reductions. Other useful resources include the software WITS (World Integrated Trade Solution) which retrieves data from various trade-related databases, such as the UNCTAD Trade Analysis and Information System (TRAINS), United Nations Commodity Trade Statistics (COMTRADE), and WTO's Integrated Database (IDB) and Consolidated Database (CTS). The Agricultural Market Access Database (AMAD), which allows for different levels of database query, can also be consulted through WITS.

> Partial Equilibrium Models

Partial equilibrium models focus on specific markets or products and ignore interactions with other markets. This methodology is suited e.g. for the analysis of sectoral policies, allowing at the same time for the inclusion of disaggregated data. One could, for example, assess the welfare effect of a reduction in tariffs, domestic support and export subsidies following a negotiated WTO outcome, which may raise world prices, benefiting exporters at the expense of importers. The magnitude of the policy changes and the pattern of trade flows determine whether a country gains or loses from liberalization. To aggregate the multitude of positive and negative effects, a systematic quantitative analysis is required. Following this link you will find information about the Agricultural Trade Policy Simulation Model (ATPSM), a simple, transparent, yet detailed partial equilibrium model designed for trade policy analysis.

> Gravity Models

Gravity models are usually used to study ex-post the impact of trade policy variables on trade flows. But what are the theoretical foundations of gravity models and the alternative specifications of the estimated gravity equations? What lessons can be drawn on how to interpret gravity estimations? What are the theoretical assumptions of using gravity models for the calculation of the trade potential for developing countries? These are some of the questions addressed by the documents provided under this section.

> Computable General Equilibrium (CGE) Models

What are the general principles governing CGE modeling, what are the main assumptions and hence limitations? What are the main databases and models used in CGE modeling?

  • The GTAP database and its derivatives - with strong neoclassical assumptions in its standard model
  • The LINKAGE model of the World Bank - a dynamic model with some non- neoclassical features
  • The MIRAGE model of CEPII - a dynamic model with important non- neoclassical features like imperfect competition and unemployment
  • The Michigan model

The documents and links provided will support an informed use of CGE models with regard to the modelling exercise as well as the interpretation of CGE results as a user/policy-maker.

> Linking Research and Policy-Making

This session involved the participation of policy makers working in the trade field at intergovernmental agencies in Geneva. It helped to bridge the gap between researchers and trade policy officials. The debate addressed major challenges to research-based policy-making in developing countries and ways of establishing contact between researchers and policy-makers. The participants discussed how applied research could be made more policy-relevant, how research could be best disseminated and communicated and how the development and sustainability of local research capacity could be ensured. The background documents will provide you with further examples of linking research to policy-making.

 

The UNCTAD Virtual Institute on Trade and Development is a knowledge-sharing programme designed to strengthen the capacity of academic institutions, particularly in developing countries, to teach and research trade issues.
For membership information: http://vi.unctad.org