The objective of this study is to quantify the potential economic effects of Non-Agricultural Market Access (NAMA) negotiations of the WTO on automotive industry of the world using a multi-region, multi-sector Computable General Equilibrium (CGE) mode...
The objective of this study is to quantify the potential economic effects of Non-Agricultural Market Access (NAMA) negotiations of the WTO on automotive industry of the world using a multi-region, multi-sector Computable General Equilibrium (CGE) model with 21 countries/regions and 22 sectors. According to the December 2008 NAMA modalities text, issued by the chair of the negotiation on NAMA, three different scenarios of tariff liberalization of NAMA are conducted on the basis of the Swiss formula with a coefficient of 8 for developed members and 20 for developing (scenario 1), with a coefficient of 8 for developed members and 22 for developing (scenario 2) and with a coefficient of 8 for developed members and 25 for developing (scenario 3). Simulation results show potential economic effects at the macroeconomic and microeconomic level of 21 countries concerned. In particular, Korea is to be one of the winners of tariff liberalization of NAMA in the WTO and Korean automotive industry is to benefit from it to a large extent in terms of its output, domestic sales, exports and trade balance, which implies that Korea needs to actively engage in NAMA negotiations of the WTO.