Publication: Assessing the Adjustment Implications of Trade Policy Changes Using the Tariff Reform Impact Simulation Tool (TRIST)
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Date
2011
ISSN
14747456
Published
2011
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TRIST is a simple, easy to use, country focused tool to assess the short-term adjustment implications of trade reform. It has been developed to improve the information available to policy makers in developing countries. It has the following key features: projections are based on revenues actually collected at the tariff line level rather than simply applying statutory rates, as in currently available tools; it is transparent, runs in Excel, with formulas and calculation steps visible to the user, and is open-source with users free to change, extend, or improve according to their needs; it has high policy relevance because it projects the impact of tariff reform on total fiscal revenue from imports (including VAT and excise taxes) and results are available at the product level so that sensitive products or sectors can be identified; the tool is flexible and can incorporate tariff liberalization scenarios involving any group of trading partners and any schedule of products. This paper describes the TRIST tool and provides a range of examples that demonstrate the insights that the tool can provide to policy makers on the short-term adjustment impacts of reducing tariffs.
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Publication Assessing the Adjustment Implications of Trade Policy Changes Using TRIST : Tariff Reform Impact Simulation Tool(2009-09-01)TRIST is a simple, easy to use tool to assess the adjustment implications of trade reform. It improves on existing tools. First, it is an improvement in terms of accuracy because projections are based on revenues actually collected at the tariff line level rather than simply applying statutory rates. Second, it is transparent and open; runs in Excel, with formulas and calculation steps visible to the user; and is open-source and users are free to change, extend, or improve according to their needs. Third, TRIST has greater policy relevance because it projects the impact of tariff reform on total fiscal revenue (including VAT and excise) and results are broken down to the product level so that sensitive products or sectors can be identified. And fourth, the tool is flexible and can incorporate tariff liberalization scenarios involving any group of trading partners and any schedules of products. This paper describes the TRIST tool and provides a range of examples that demonstrate the insights that the tool can provide to policy makers on the adjustment impacts of reducing tariffs.Publication What Explains the Low Survival Rate of Developing Country Export Flows?(2009-06-01)Successful export growth and diversification require not only entry into new export products and markets, but also the survival and growth of export flows. This paper uses a detailed, cross-country dataset of product level bilateral export flows to illustrate that exporting is an extremely perilous activity and especially so in low-income countries. The authors find that unobserved individual heterogeneity in product-level export flow data prevails despite controlling for a wide range of observed country and product characteristics. This questions previous studies that have used the Cox proportional hazards model to model export survival. The authors estimate a Prentice-Gloeckler model, amended with a gamma mixture distribution summarizing unobserved individual heterogeneity. The empirical results confirm the significance of a range of products as well as country-specific factors in determining the survival of export flows. From a policy perspective, an interesting finding is the importance of learning-by-doing for export survival: experience with exporting the same product to other markets or different products to the same market are found to strongly increase the chance of export survival. A better understanding of such learning effects could substantially improve the effectiveness of export promotion strategies.Publication What Explains the Low Survival Rate of Developing Country Export Flows?(World Bank, 2011-03-30)Successful export growth and diversification require not only entry into new export products and markets but also the survival and growth of export flows. For a cross-country dataset of product-level bilateral export flows, exporting is found to be a perilous activity, especially in low-income countries. Unobserved individual heterogeneity in product-level export flow data prevails even when a wide range of observed country and product characteristics are controlled for. This questions previous studies that used the Cox proportional hazards model to analyze export survival. Following Meyer (1990), a Prentice-Gloeckler (1978) model is estimated, amended with a gamma mixture distribution summarizing unobserved individual heterogeneity. The empirical results confirm the significance of a range of product- as well as country-specific factors in determining the survival of new export flows. Important for policymaking is the finding of the value of learning-by-doing for export survival: experience with exporting the same product to other markets or different products to the same market is found to strongly increase the chance of export survival. A better understanding of such learning effects could substantially improve the effectiveness of export promotion strategies.Publication Assessing the Direct Economic Effects of Reallocating Irrigation Water to Alternative Uses Concepts and an Application(2009-04-01)This study discusses potential economic implications for Nigeria of an Economic Partnership Agreement with the European Union. It uses the World Bank s Tariff Reform Impact Simulation Tool to assess the effects of preferential tariff liberalization with respect to the European Union. The results suggest that the impact of an Economic Partnership Agreement on total imports into Nigeria will be slight. This is in part because the Agreement will likely allow the most protected sectors to be excluded from liberalization, and also because where substantial tariffs are involved much of the increase in imports from the European Union will occur at the expense of other suppliers of imports. It is this trade diversion, arising from the discriminatory nature of the EPA, which generates a negative welfare impact of the tariff reforms. One way for Nigeria to limit these losses is to pursue non-preferential trade liberalization before implementing an EPA. The paper looks at the large number of import bans in Nigeria and argues that the positive impact on welfare of removing these import bans is likely to be substantial. Their removal would undermine a major reason for cross border smuggling and pave the way for a return to normal regional trade flows. The paper shows how an Economic Partnership Agreement presents an opportunity for accelerating the reforms that are needed to support a strategy to increase regional and global trade integration. Such an agreement is more likely to have positive and significant impacts when integrated into a comprehensive strategy toward competitiveness and alleviation of the supply constraints that have stifled the impact of previous trade agreements. Key issues that should be addressed include liberalization and regulatory strengthening of services sectors to ensure that all firms in Nigeria have access to efficiently produced backbone services and initiatives to address the country s poor trade logistics performance.Publication Product Specific Technical Assistance for Exports--Has It Been Effective?(2009)The international community is placing increasing emphasis on aid for trade to assist low income countries to integrate into the global economy and to address their domestic constraints to export driven growth. There is, however, scant information on the effectiveness of previous support for export development to inform the design of new initiatives. In this paper, we exploit information on product specific technical assistance for trade and estimate a simple partial equilibrium model to assess the impact on the key measurable outcome--exports of the product subject to assistance. We apply a difference in differences approach to isolate the impact of the policy interventions and draw four main conclusions: on average, export development (ED) programs have coincided with or predated stronger export performance; such programs appear to be more effective where there is already significant export activity; there is some concern about the additionality of the programs and that support may be being channeled to sectors that would have prospered anyway; ultimately, conclusions strongly depend on what one postulates would have happened in the absence of the policy intervention, so the definition of a credible counterfactual is of utmost importance for the evaluation of technical assistance for exports.
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