Rationale for Market Access analysis
Despite successive rounds of multilateral, regional, and unilateral trade liberalization, some trade barriers (including tariffs) remain highly restrictive in many (both developed and developing) countries.
For any government, it is crucial to be able to assess or to pre-empt the impact of different trade policy options. Market access analysis is a very useful tool that can be used to anticipate the likely economic effects of various policy alternatives.
- Impact of domestic trade reforms. For political economy or social purposes, it is often important to determine the distribution of the potential gains and losses from any contemplated policy changes. This will assist in anticipating any adjustment costs associated with reform implementation.
- Impact of foreign trade liberalization. For instance, when preparing for trade negotiations, market access analysis helps identify the sensitive sectors where negotiating efforts should be focused. Also, it could be useful in the formation of negotiating coalitions in multilateral/regional negotiations.
The market access analysis tool included in the WITS package allows the researcher to investigate the impact of unilateral/preferential/multilateral trade reforms at home or abroad on various variables including:
- Trade flows (import, exports, trade creation, trade diversion),
- world prices,
- tariff revenue, and
- economic welfare
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The World Bank, 2010