> 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.