Figures and tables in Impacts of Trade Liberalization on Poverty and Inequality in Argentina: Policy Insights from a Non-parametric CGE Microsimulation Analysis

Abstract

This paper studies the economic, poverty, and income inequality impacts of both world and domestic trade reform in Argentina, with a special focus on export taxes. Argentina offers an interesting case study as the only large agricultural exporter that has, at many points in its history, applied export taxes to several of its agricultural products. The paper combines results from a global economy-wide model (World Bank’s LINKAGE model), a national CGE model, and microsimulations. The results suggest that full liberalization of world trade (including subsidies and import taxes, but not export taxes), both for agricultural and non-agricultural goods, reduces poverty and inequality in Argentina. However, if only agricultural goods are included, indicators for poverty and inequality do not improve and even deteriorate somewhat. This is particularly the case if export taxes are eliminated.

This article contains 3 tables.

Tables

Table 1. Model simulations.

Simulation	Scenario	Description
1	GLOB	Removing all agricultural subsidies and all import and export taxes on goods trade in rest-of-the-world and Argentina
2	GLOBag	Same as GLOB except just for agricultural reform (i.e., domestic, import and export taxes and subsidies removed only on agricultural products)
3	WTO	Same as GLOB except not removing export taxes
4	WTOag	Same as WTO except just agricultural reform
5	ROW	Same as GLOB except just in rest of the world, and because it does not include Argentina, export taxes in this country are operational in this simulation
6	ROWag	Same as ROW except just agricultural reform
7	ARG	Same as GLOB except just in Argentina
8	ARGag	Same as ARG except just agricultural reform
9	ARG-ex	Same as ARG except only removing export taxes in all categories of goods and services, and again only in Argentina
10	ARGag-ex	Same as Sim 9 except just agricultural reform

Table 2. Aggregate simulation results

	BASE	GLOB	GLOBag	WTO	WTOag	ROW	ROWag	ARG	ARGag	ARG-ex	ARGagex
GDP factor cost (bn LCU)^a	4,395	−0.2	−0.8	1.5	0.2	0.3	0.2	−0.4	−0.9	−1.7	−0.9
Household consumption (bn LCU)^a	3,263	0.5	0.0	2.1	0.9	1.0	0.9	−0.5	−0.8	−1.7	−0.8
Poverty line ^a	−-	6.3	6.0	2.1	1.2	1.3	1.2	4.9	4.8	4.1	4.8
Real exchange rate ^a	1	−4.6	−6.3	0.5	−2.9	−2.0	−2.9	−2.7	−3.5	−5.3	−3.5
Terms of trade ^a	−-	0.1	1.6	1.0	2.0	2.3	2.0	−2.2	−0.6	−1.3	−0.6
Unemployment rate (%) ^b	12.3	−0.4	0.8	−2.6	−0.4	−0.6	−0.4	0.1	1.1	2.4	1.1
Extreme poverty rate (%) ^b	12.7	1.0	1.5	−0.5	0.1	0.0	0.1	0.9	1.3	1.7	1.3
Moderate poverty rate (%) ^b	34.2	2.3	2.9	−0.4	0.3	0.3	0.3	2.0	2.5	2.9	2.5
Gini household per capita income	0.499	0.499	0.500	0.495	0.498	0.498	0.498	0.499	0.500	0.502	0.500

Source: Authors′ estimates

Percentage change from base;

Percentage points difference from base

Table 3. Sectoral simulation results (percent change from base)

	BASE (bn LCU)	GLOB	GLOBag	WTO	WTOag	ROW	ROWag	ARG	ARGag	ARG-ex	ARGagex
GDP, agriculture	434	16.5	16.1	9.6	6.6	6.8	6.6	10.4	10.4	8.0	10.4
GDP, non-agriculture	3,961	−2.0	−2.7	0.6	−0.5	−0.4	−0.5	−1.6	−2.1	−2.8	−2.1
Exports, agriculture	470	44.0	43.8	15.3	11.4	10.9	11.4	34.4	34.6	30.4	34.6
Imports, agriculture	15	113.5	104.2	0.2	−3.0	1.0	−3.0	115.5	116.5	113.0	116.5
Exports, non-agriculture	894	0.6	−17.1	4.5	−7.1	−6.7	−7.1	7.4	−10.6	−4.0	−10.6
Imports non-agriculture	1,025	19.4	6.3	12.6	2.2	2.3	2.2	17.1	3.9	7.0	3.9
Food consumption (households)	641	−0.7	−1.1	1.5	0.6	0.7	0.6	−1.3	−1.6	−2.3	−1.6

Source: Authors′ estimates