The Benefits of Intellectual Property Rights in EU Free Trade Agreements

In particular, the data for this part of our analysis is the trade data that forms part of the underlying structure of the OECD TiVA database and is therefore less specific in its sectoral classification. [...] The main difference from GTAP is the incorporation of the Eaton and Kortum demand structure, where we derive the gravity equation for our structural estimation of the trade elasticities and changes in trade costs, as discussed above, from this same model. [...] The link between sectors is both direct, such as the input of steel into the production of transport equipment, and also indirect, as with the link between chemicals and agriculture through the production of fertilizers and pesticides. [...] This database is then projected to fit more recent economic data for the year 2040, using real macroeconomic data from the IMF and trade data from the UN and Eurostat Tariffs reflect the most recent applied rates, as incorporated in the GTAP database, as of 2014. [...] The economic effects of the FTA are the quantified differences between the “baseline” equilibrium (before the policy change) and the “scenario” equilibrium after the policy change.