Moldova Trade Study : Note 2. Is the DCFTA Good for Moldova? Analysis of Moldova’s Trade Options Using a Dynamic Computable General Equilibrium Model

Moldova’s recent Association Agreement with the European Union (EU), which includes a Deep and Comprehensive Free Trade Agreement (DCFTA), represents an important opportunity, as well as challenges. This analytical document has been commissioned by the World Bank Group to provide insights into potential outcomes of the DCFTA and of other trade options that Moldova has, using a Dynamic Computable General Equilibrium (DCGE) model calibrated to its economy. This paper begins by describing the general trends in economic relations between Moldova and the EU over the past 10 years, with an emphasis on trade, as well as Foreign direct investment (FDI) and labor migration. This section includes some additional facts and details that complement the Trade Competitiveness Diagnostic. In the second section, the paper presents the main elements of the DCFTA and highlights the trade commitments and concessions that the EU and Moldova undertook. It also includes a short review of available literature on the ex-ante or ex post impact assessments of other Association Agreements between the EU and third countries that have been done using CGE models. The third section presents key features of the DCGE and discusses the data used for assembling the Social Accounting Matrix (SAM). Then, the main features of the simulated trade scenarios are presented. Finally, this paper discusses the DCGE simulation results, including the effects of the various scenarios on welfare, trade, and economic activity level. Some distributional impacts are also brought into discussion. The final section concludes and makes several recommendations.

Bibliographic Details

Main Author:	World Bank
Format:	Report biblioteca
Language:	English en_US
Published:	World Bank, Washington, DC 2016-01-30
Subjects:	TARIFFS, REGULATORY FRAMEWORK, CUSTOMS ADMINISTRATION, CUSTOMS UNION, EXPORT MARKETS, CURRENCY APPRECIATION, MULTILATERAL TRADE, PROFIT MARGINS, EXPORT CAPACITY, FREE TRADE AGREEMENT, WORLD TRADE ORGANIZATION, PRODUCTION, FOREIGN INVESTORS, INCOME, BARRIERS ON IMPORTS, EXPECTATIONS, TRADE BARRIERS, REAL GDP, PROPERTY RIGHTS, PROTECTIONIST, DOMESTIC MARKET, EXPORTS, NATIONAL TREATMENT, STATISTICAL DATA, ELASTICITY, TRADE AREAS, EXPORT PRICES, ECONOMIC RELATIONS, WELFARE, TARIFF CONCESSIONS, SPECIAL INCENTIVES, OPTIMIZATION, GROSS VALUE, INCENTIVES, FREE IMPORTS, EQUILIBRIUM, DISTRIBUTION, INPUTS, PAYMENTS, FREE TRADE, TECHNICAL REGULATIONS, TRENDS, PREFERENTIAL ACCESS, TRADE AGREEMENTS, CUSTOMS PROCEDURES, CUSTOMS DUTIES, TRADE IN GOODS, INFLUENCE, TRADE BALANCE, FOREIGN TRADE, TOTAL FACTOR PRODUCTIVITY, SAVINGS, IMPORT PRICES, COSTS, TRADE RESTRICTIONS, TELECOMMUNICATIONS, RENT, CUSTOMS, PRODUCTIVITY, FREE ACCESS, MONOPOLY, IMPERFECT COMPETITION, QUOTAS, CRITERIA, EXPORT VOLUME, MARKETS, WTO, TARIFF REDUCTIONS, IMPORTS, PREFERENTIAL AGREEMENTS, TRADE POLICY, ELASTICITY OF SUBSTITUTION, AVERAGE PRODUCTION COSTS, GENERAL EQUILIBRIUM MODEL, UTILITY, TRADE AGREEMENT, CUSTOMS ENFORCEMENT, GROSS DOMESTIC PRODUCT, TRADE COMPETITIVENESS, EXPORT MARKET, PRODUCTION INPUTS, TAXES, PROTECTIONIST MEASURES, INTERNATIONAL STANDARDS, TRADE VOLUME, EXPORT FACILITATION, CONSUMPTION, GENERAL EQUILIBRIUM, TRADE IN SERVICES, GROSS FIXED CAPITAL FORMATION, VALUE ADDED, TRAVEL, CAPITAL, WAGES, TRADE PREFERENCES, DEFLATORS, INTERNATIONAL TRADE, EXPORT COMPETITIVENESS, VALUE, COMPETITIVENESS, TRADE ARRANGEMENTS, PRODUCTION FUNCTIONS, TRADE DEFICIT, PURCHASING POWER, ECONOMIC SECTORS, DEVELOPMENT STRATEGY, COMPARATIVE ADVANTAGES, EXPORT PRODUCTS, DEMAND, NATIONAL INCOME, DOMESTIC SALES, EXPECTED VALUE, ECONOMY, CONSUMERS, AGRICULTURE, TAX RATES, TRADE AREA, TRADE FACILITATION, TRADE LIBERALIZATION, PRODUCTION FUNCTION, PREFERENTIAL TREATMENT, SKILLED LABOR, TRADE DIVERSION, TRADE, ECONOMIC INTEGRATION, MUTUAL RECOGNITION, GDP, EXPORT PRICE, GOODS, ECONOMIES OF SCALE, GENERALIZED SYSTEM OF PREFERENCES, GROWTH RATE, BILATERAL TRADE, MARGINAL REVENUE, INVESTMENT, SUPERMARKETS, HOTELS, DOMESTIC PRODUCTION, CUSTOMS UNIONS, TARIFF, TRADE RELATIONS, TRADE SANCTIONS, FREE TRADE AREA, CONSUMER PRICE INDEX, WORLD TRADE, TARIFF CONCESSION, MOST FAVORED NATION, PREFERENTIAL TARIFF, PRICE INDEXES, FINANCIAL SECTOR, OUTCOMES, IMPORT DUTIES, IMPORT DUTY, TRADE REGIME, CUSTOMS DECLARATIONS, OUTSOURCING, UNSKILLED LABOR, TARIFF TREATMENT, PRICES, PRODUCTION COSTS, BENEFITS, ADAPTIVE EXPECTATIONS, INEQUALITY,
Online Access:	http://documents.worldbank.org/curated/en/2016/03/26075964/dcfta-good-moldova-analysis-moldova’s-trade-options-using-dynamic-computable-general-equilibrium-model http://hdl.handle.net/10986/24043
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