Quantifying the USMCA as Amended

Paper presented at the GTAP Annual Conference, Warsaw, 19-21 June 2019

50 Pages Posted: 26 Jun 2019 Last revised: 26 Oct 2020

See all articles by Dan Ciuriak

Dan Ciuriak

Ciuriak Consulting Inc.; Centre for International Governance Innovation (CIGI); C.D. Howe Institute; Asia Pacific Foundation of Canada; BKP Development Research & Consulting GmbH

Ali Dadkhah

Ciuriak Consulting Inc.; Infinity Law

Jingliang Xiao

Infinite-Sum Modeling Inc.; Ciuriak Consulting Inc.

Date Written: June 19, 2019

Abstract

This study develops a quantitative analysis of the impact of the United States-Mexico-Canada Agreement (USMCA), originally signed on 30 November 2018, and amended by the Protocol of Amendment signed in Mexico City on 10 December 2019. The USMCA provides a major overhaul of the North American Free Trade Agreement (NAFTA) based largely on the Trans-Pacific Partnership (TPP) text. It introduces only minor changes to market access, intensifies trade and investment diversion, increases uncertainty by weakening the institutional framework of the NAFTA, and seeks to shift the net benefits of the NAFTA towards the United States.

The evaluation of the USMCA is developed using simulations on a computable general equilibrium (CGE) model, based on a dynamic specification of the Global Trade Analysis Project (GTAP) model, modified to directly represent goods and services trade conducted through foreign affiliates, as well as on a cross-border basis, and to reflect the impact of liberalization of FDI. The impact of the USMCA is assessed against a baseline that reflects an in-force NAFTA. These results are compared to the impacts of NAFTA lapsing to infer the difference between the USMCA and a “hard” NAFTA exit scenario.

Keywords: USMCA, CGE, uncertainty, rules of origin, value of bindings

JEL Classification: F02, F13, F15

Suggested Citation

Ciuriak, Dan and Dadkhah, Ali and Xiao, Jingliang, Quantifying the USMCA as Amended (June 19, 2019). Paper presented at the GTAP Annual Conference, Warsaw, 19-21 June 2019, Available at SSRN: https://ssrn.com/abstract=3408666 or http://dx.doi.org/10.2139/ssrn.3408666

Dan Ciuriak (Contact Author)

Ciuriak Consulting Inc. ( email )

83 Stewart St.
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Centre for International Governance Innovation (CIGI) ( email )

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C.D. Howe Institute ( email )

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Asia Pacific Foundation of Canada ( email )

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HOME PAGE: http://ciuriakconsulting.com/

BKP Development Research & Consulting GmbH ( email )

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Ali Dadkhah

Ciuriak Consulting Inc. ( email )

83 Stewart St.
Ottawa, Ontario K1N 6H9
Canada

Infinity Law ( email )

200-931 Fort St.
Victoria, V8V 3K3
Canada

Jingliang Xiao

Infinite-Sum Modeling Inc. ( email )

16167,Glenbrooks Pl
Vancouver, BC - British Columbia v4n1t3
Canada
6047245981 (Phone)
6047245981 (Fax)

HOME PAGE: http://www.infsum.com/en/

Ciuriak Consulting Inc. ( email )

83 Stewart St.
Ottawa, Ontario K1N 6H9
Canada

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