Trade performance of the EU economies:
Inter-country input-output tables (IOTs) as
a necessary tool
Conference of European Statistics Stakeholders, Budapest
20-21 October 2016
Lars Nilsson
Deputy Head of Unit, Associate Professor
Chief Economist and Trade Analysis Unit
DG TRADE
Outline
• Studies conducted by DG Trade on the impact of
trade agreements
• Methodology and data (IOTs) used
• Limitations of the analyses and alternative
methodologies
• Summary and conclusions
Studies on the impact of trade
agreements
• Impact Assessments (IAs), requirement for all major
Commission initiatives
• Sustainability Impact Assessments (SIAs) complement
IAs with additional sectoral- and qualitative analyses
and stakeholder consultations
• Economic assessment of the negotiated outcome (EANO)
once the negotiations are concluded
• Ex-post analysis of the agreement once an agreement
has entered into force and sufficient time has passed
Computable general equilibrium
(CGE) models
• Use actual economic data to estimate how an economy
might react to changes in e.g. trade policy
• Reflects linkages between sectors and across countries. Can
simulate reductions in tariff and non-tariff barriers
• Results to be interpreted as compared to the baseline, i.e.,
what it would have been in the absence of an agreement
Limitations and other methodologies
• Level of aggregation - sector details in goods and services
are limited
• Certain elements are difficult to assess properly,
irrespective of methodology
• Partial equilibrium models to be used when product level
results are needed (but linkages lost)
• Econometrics used primarily for ex-post assessments
Underlying data – the IO tables
• Underlying data for most studies come from the Global
Trade Analysis Project (GTAP) data base.
• Latest release features three reference years and consistent
IO tables for 140 regions and 57 (GTAP) sectors.
• Contains bilateral trade patterns, tariffs, production,
consumption and intermediate use of commodities and
services, energy data, CO2 emissions, etc.
• For new IO tables, sources and procedures used to create
them must be provided along with the data
Improving EU IO tables
• European Court of Auditors of EU preferential trade
arrangements - recommended updating the EU IO tables
available in the GTAP database
• Administrative Arrangement between DG TRADE and DG
JRC. Purpose is to more accurately reflect technical
coefficients and structures of commodities for final and
intermediate use
• Data to match GTAP submission requirements. Deadline
November 2016
• In parallel, trying to improve the data in the area of
services by further disaggregation and split by mode of
supply
Summary and conclusions
• IO tables indispensable for assessing the impact of trade
agreements
• Work undertaken to update EU IO tables and improve the
underlying data
• Alternative methodologies available for analyses on a
specific set of products or an industry