Spillover Effects of TTIP on BRICS Economies: A Dynamic GVC-Based CGE Model
by Songfeng CAI, Yaxiong ZHANG and Bo MENG
This paper uses a GVC (Global Value Chain)-based CGE model to assess the impact of TTIP between the U.S. and the EU on their main trading partners who are mainly engaged at the low end in the division system of global value chains, such as BRICS countries. The simulation results indicate that in general the TTIP would positively impact global trade and economies due to the reduction of both tariff and non-tariff barriers. With great increases in the US–EU bilateral trade, significant economic gains for the U.S. and the EU can be expected. For most BRICS countries, the aggregate exports and GDP suffer small negative impacts from the TTIP, except Brazil, but the inter-country trade within BRICS economies increases due to the substitution effect between the US–EU trade and the imports from BRICS countries when the TTIP commences.
Keywords: TTIP, BRICS, GVC, NTBs, Spillover
JEL classification: F13, C68, D58
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