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Ifo Policy Issue: Free Trade Agreement

Proposals for a comprehensive free trade agreement (covering the trade of goods and/or services) between the USA and the EU have been repeatedly put forward in the past. A Trans Atlantic Free Trade Agreement (TAFTA – Trans Atlantic Free Trade Agreement) should be considered against the background of (i) the eroding competitiveness of the industrialized states versus emerging economies like China and India, (ii) the long-term standstill in multi-lateral trade liberalization in the framework of the WTO and (iii) the urgent need for growth-boosting reforms highlighted by the crisis. A TAFTA would go further than the dimensions of all existing free trade agreements and create a free trade area that would cover almost 50% of global economic output, but account for a mere 11.8% of the world's population.

In a study on the dimensions and effects of a free trade agreement between the EU and the USA the Ifo Institute comes to the conclusion that a far-reaching trade agreement that also lowers non-tariff trade barriers (like import quotas, for example) would lead to an increase in exports to the USA, especially by medium-sized companies. Real wages in Germany would increase by around 1.6% and unemployment would fall slightly. Within the EU smaller countries in particular would benefit disproportionately from such an agreement, while lasting negative effects on the world trade regime are unlikely.

Video

CESifo Media Library
Munich Economic Summit 2014: Panel 2 BRICS for Europe to Build With
John Peet, Gabriel Felbermayr, Karel De Gucht, Karl-Ludwig Kley, Anton F. Börner, William M. Drozdiak
16.05.2014 | 01:52:39 | English

Basic Texts

  1. Felbermayr, Gabriel, Mario Larch, Lisandra Flach, Erdal Yalcin and Sebastian Benz, "Dimensionen und Auswirkungen eines Freihandelsabkommens zwischen der EU und den USA", ifo Institut, München, 2013, Studie im Auftrag des Bundesministeriums für Wirtschaft und Technologie, Januar 2013, Endbericht. | Details | PDF Download

  2. Felbermayr, Gabriel, Mario Larch, Lisandra Flach, Erdal Yalcin and Sebastian Benz, "Dimensions and Effects of a Transatlantic Free Trade Agreement Between the EU and US", 2013, Study commissioned by German Federal Ministry of Economics and Technology, January 2013, Executive Summary | Details | PDF Download

  3. Felbermayr, Gabriel, Mario Larch, Lisandra Flach, Erdal Yalcin, Sebastian Benz and Finn Krüger, "Dimensionen und Effekte eines transatlantischen Freihandelsabkommens", ifo Schnelldienst 66 (04), 2013, 22-31 | Details | PDF Download

Books and Articles

  1. Dorn, Florian, Manuela Krause, Niklas Potrafke and Daniel Weishaar, "Die Freihandelsabkommen TTIP und CETA und ihre Auswirkungen – was sagen die Ökonomen?", ifo Schnelldienst 69 (18), 2016, 41-46 | Details | PDF Download

  2. Yalcin, Erdal, "EU-Turkish Customs Union: A Reasonable Roadmap", CESifo Forum 17 (2), 2016, 15-20 | Details | PDF Download

  3. Aichele, Rahel and Gabriel Felbermayr, "The Trans-Pacific Partnership Deal (TPP): What Are the Economic Consequences for In- and Outsiders?", CESifo Forum 16 (4), 2015, 53-64 | Details | PDF Download

  4. Felbermayr, Gabriel, Thomas Mayer, Gerhard Illing, Jürgen Pfister, Stephan Klasen, Michael Jakob, Heinz-Jürgen Axt and Harold James, "Globalisierung und regionale Integration: Ökonomische Entwicklungen, Perspektiven und Grenzen", ifo Schnelldienst 68 (16), 2015, 03-30 | Details | PDF Download

  5. Yalcin, Erdal, "Foreign direct investments: current challenges; introduction", CESifo Forum 16 (2), 2015, 03-04 | Details | PDF Download

  6. Aichele, Rahel and Gabriel Felbermayr, "The impact of TTIP on third countries", in: M. S. Akman, S. J. Evenett, and P. Low (eds.): Catalyst? TTIP’s impact on the Rest, VoxEU ebook, 2015, 27-33 | Details

  7. Felbermayr, Gabriel, Wilhelm Kohler, Christoph Scherrer, Richard Senti, Johannes Wallacher, Peter-Christian Müller-Graff, Heribert Dieter and Stephan Leibfried, "Welthandel: Frei und fair? Handelsabkommen in der Kritik", ifo Schnelldienst 68 (07), 2015, 03-30 | Details | PDF Download

  8. Felbermayr, Gabriel and Wilhelm Kohler, "TTIP und die Entwicklungsländer: Gefahren, Potenziale und Politikoptionen", IAW Impulse, Nr. 2, 2015, Also published in: ifo Schnelldienst 68 (02), 2015 | Details

  9. Felbermayr, Gabriel and Wilhelm Kohler, "TTIP und die Entwicklungsländer: Gefahren, Potenziale und Politikoptionen", ifo Schnelldienst 68 (02), 2015, Also published in www.iaw.edu | Details | PDF Download

  10. Felbermayr, Gabriel, Wilhelm Kohler, Rahel Aichele, Günther Klee and Erdal Yalcin, Potential impacts of the Transatlantic Trade and Investment Partnership (TTIP) on developing and emerging economies (Executive Summary), ifo Institut, München, 2015, 7 | Details | PDF Download

  11. Felbermayr, Gabriel, Wilhelm Kohler, Rahel Aichele, Günther Klee and Erdal Yalcin, Mögliche Auswirkungen der Transatlantischen Handels- und Investitionspartnerschaft (TTIP) auf Entwicklungs- und Schwellenländer, ifo Institut, München, 2015, 250 , Kurzfassung | Executive Summary | Details | PDF Download

  12. Felbermayr, Gabriel, Wilhelm Kohler, Rahel Aichele, Günther Klee and Erdal Yalcin, Mögliche Auswirkungen der Transatlantischen Handels- und Investitionspartnerschaft (TTIP) auf Entwicklungs- und Schwellenländer (Executive Summary), ifo Institut, München, 2015, 7 | Details | PDF Download

  13. Sinn, Hans-Werner, "Introduction: Free Trade and Prosperity", CESifo Forum 15 (4), 2014, 08-13 | Details | PDF Download

  14. Felbermayr, Gabriel, Benedikt Heid and Mario Larch, "TTIP: Small Gains, High Risks?", CESifo Forum 15 (4), 2014, 20-30 | Details | PDF Download

  15. Aichele, Rahel, Gabriel J. Felbermayr and Inga Heiland, "Going Deep: The Trade and Welfare Effects of TTIP", CESifo Working Paper No. 5150, December 2014 | Details | PDF Download

  16. Aichele, Rahel and Gabriel Felbermayr, "CETA: Welche Effekte hat das EU-Kanada-Freihandelsabkommen auf Deutschland?", ifo Schnelldienst 67 (24), 2014, 20-30 | Details | PDF Download

  17. Felbermayr, Gabriel, Wilhelm Kohler, Volker Treier, Heribert Dieter, Christoph Herrmann, Cosimo Beverelli, Simon Neumüller, Robert Teh, Richard Senti, Matthias Lücke and Peter-Tobias Stoll, "Bali-Abkommen: Wer gewinnt, und wer trägt die Kosten?", ifo Schnelldienst 67 (03), 2014, 03-34 | Details | PDF Download

  18. Felbermayr, Gabriel and Mario Larch, "Transatlantic Free Trade: Questions and Answers from the Vantage Point of Trade Theory", CESifo Forum 14 (4), 2013, 03-17 | Details | PDF Download

  19. Yalcin, Erdal, "50 Jahre Ankara-Abkommen: Bisherige europäisch-türkische Wirtschaftsbeziehungen und zukünftige Perspektiven", ifo Schnelldienst 66 (22), 2013, 26-34 | Details | PDF Download

  20. Felbermayr, Gabriel and Erdal Yalcin, "Export Credit Guarantees and Export Performance: An Empirical Analysis for Germany", The World Economy 36 (8), 2013, 967–999 | Details

  21. Felbermayr, Gabriel J. and Mario Larch, "The Transatlantic Trade and Investment Partnership (TTIP): Potentials, Problems and Perspectives ", CESifo Forum 14 (2), 2013, 49-60 | Details | PDF Download

  22. Benz, Sebastian and Erdal Yalcin, "Ökonomische Effekte eines Freihandelsabkommens zwischen Japan und der EU", ifo Schnelldienst 66 (14), 2013, 35-40 | Details | PDF Download

  23. Felbermayr, Gabriel, Mario Larch, Berend Diekmann and Rolf J. Langhammer, "Transatlantische Handels- und Investitionspartnerschaft: Welche Effekte sind zu erwarten?", ifo Schnelldienst 66 (06), 2013, 03-12 | Details | PDF Download

  24. Felbermayr, Gabriel J., Benjamin Jung and Mario Larch, "Optimal Tariffs, Retaliation and the Welfare Loss from Tariff Wars in the Melitz Model", Journal of International Economics 89 (1), 2013, 13–25 | Details

  25. Gröschl, Jasmin, "Neuer Protektionismus – Gefahren für den Freihandel ", ifo Schnelldienst 65 (15), 2012, 35-39 | Details | PDF Download

  26. Felbermayr, Gabriel, Benjamin Jung and Mario Larch, "Tariffs and Welfare in New Trade Theory Models", Working Papers in Economics and Finance No. 41, University of Tübingen, Tübingen, 2012, Download | Details

  27. Felbermayr, Gabriel and Benjamin Jung, "Unilateral Trade Liberalization in the Melitz Model: A Note", Economics Bulletin 32 (2), 2012, 1724-1730 | Details

  28. Felbermayr, Gabriel and Benjamin Jung, "Unilateral Trade Liberalization in the Melitz Model: A Note", University of Tübingen Working Papers in Economics and Finance No. 30, 2012, Download | Details

  29. Felbermayr, Gabriel, Inga Heiland and Erdal Yalcin, "Beschäftigungseffekte der Exportkreditgarantien der Bundesrepublik Deutschland »Hermesdeckungen«", ifo Schnelldienst 65 (01), 2012, 20-30 | Details | PDF Download

  30. Yalcin, Erdal and Kilian Zacher, "Zur Lage der deutschen Exporte", ifo Schnelldienst 64 (21), 2011, 17-25 | Details | PDF Download

  31. Felbermayr, Gabriel J., Benjamin Jung and Mario Larch, "Optimal Tariffs, Retaliation and the Welfare Loss from Tariff Wars in the Melitz Model", CESifo Working Paper No. 3474, May 2011 | Details | PDF Download

  32. Felbermayr, Gabriel and Wilhelm Kohler, "Modeling the Extensive Margin of World Trade: New Evidence on GATT and WTO Membership", World Economy 33 (11), 2010, 1430–1469 | Details

Articles and Interviews by Staff

  1. TTIP muss kommen | Sep 20, 2016 | Press article |
    Presseartikel von Marcel Fratzscher und Clemens Fuest, Handelsblatt, 20.09.2016, S. 48. Details

  2. Hans-Werner Sinn, Frieden durch Freihandel | Apr 14, 2014 | Press article |
    Presseartikel von Hans-Werner Sinn, Wirtschaftswoche, 14.04.2014, Nr. 16, S. 40 Details

  3. Gabriel Felbermayr, Freihandel für den Wohlstand | Feb 27, 2014 | Press article |
    Presseartikel von Gabriel Felbermayr, Die Zeit, 27.02.2014, Nr. 10, S. 35 Details

  4. Gabriel Felbermayr, "Freier Handel führt zu Ungleichheit" | Feb 18, 2014 | Press interview |
    Interview mit Gabriel Felbermayr, n-tv.de, 18.02.2014 Details

  5. Gabriel Felbermayr, Was der Handelskompromiss von Bali wirklich bringt | Dec 14, 2013 | Press article |
    Presseartikel von Gabriel Felbermayr, Frankfurter Allgemeine Zeitung, 14.12.2013, Nr. 291, S. 14 Details

  6. Gabriel Felbermayr, Stimmt es, dass ... das ifo Institut die Öffentlichkeit täuscht? Gegenrede | Nov 15, 2013 | Press article |
    Presseartikel von Gabriel Felbermayr, Handelsblatt Nr. 221, 15.11.2013, S. 13 Details

Press Echo

  1. ifo-Präsident Sinn fordert von G7 Handelsliberalisierung | May 28, 2015 | Press echo |
    Presseecho, Dow Jones, 28.05.2015. Details

  2. Der neue Cowboy-Kapitalismus | Apr 11, 2015 | Press echo |
    Presseecho, Focus online, 11.04.2015. Details

  3. TTIP - Skepsis auch beim Bauern- und Landvolktag | Mar 3, 2015 | Press echo |
    Presseecho, Passauer Neue Presse, 12.03.2015 Details

  4. Freihandel für alle | Jan 22, 2015 | Press echo |
    Presseecho, www.zeit.de, 22.01.2015 Details

  5. TTIP soll auch Armen nutzen | Jan 22, 2015 | Press echo |
    Presseecho, www.taz.de, 22.01.2015 Details

  6. 2014: Ist das da ein Bär am Horizont? | Mar 24, 2014 | Press echo |
    Presseecho, Smart Investor, 24.03.2014 Details

  7. US-Handelsabkommen: Skepsis in EU wächst | Mar 19, 2014 | Press echo |
    Presseecho, Kurier, 21.03.2014 Details

  8. Das Symbol der Globalisierung | Aug 29, 2013 | Press echo |
    Presseecho, Frankfurter Allgemeine Zeitung, 29.08.2013, S. 10 Details

  9. Institut rät zu Freihandel zwischen EU und Japan | Jul 31, 2013 | Press echo |
    Presseecho, Frankfurter Allgemeine Zeitung, 31.07.2013, S. 10 Details

  10. Die Schweiz in der Defensive | Jul 10, 2013 | Press echo |
    Presseecho, Neue Zürcher Zeitung, 10.07.2013 Details


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