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GTAP and discordance of wearing apparel in textiles

Geneva, 2 Sep (Chakravarthi Raghavan) - The GTAP (The Global Trade Analysis Project), whose data base is accessible on subscription and is used widely by econometric modellers, now appears to be addressing its sectoral discordance in the textiles and apparel sector.

The use of the GTAP model by the WTO in a staff discussion paper to project some dramatic consequences of the end to the Agreement on Textiles and Clothing at the end of 2004 - a definitive end that was anticipated at the time of the Marrakesh Agreement’s signature in 1994, but almost presented as unforeseen in the WTO staff study, resulted in the GTAP model data base in the textiles and clothing sector to come under some scrutiny.

As a result, a number of mistakes and errors in that data base have come to light. Some of these have been brought out in an article in the SUNS #5636, and in relation to the Byrd amendment arbitration award in SUNS #5638.

[Some of the typos and inadvertently omitted paras of the article in SUNS #5636 have been corrected and the corrected version posted at www.sunsonline.org, and for those who don’t have access, at the publicly accessible TWN website, www.twnside.org.sg]

In a communication, under the tile ‘Wearing Apparel in Textiles’, that appears to have been sent to its data base users and sponsors, GTAP has said:

“Last week Joe Francois pointed out a surprising feature in the sectoral concord used by GTAP. This has to do with items like hosiery, t-shirts and some knitted garments, mapped with textiles and not with wearing apparel.

“This issue and its ramifications have to be explored further before we can address it in the data base.

“In the meantime, users should be made aware of it.”

One of the recipients, who did not want to be identified, confirmed such a communication.

The GTAP, with headquarters at Purdue University, is organized as a consortium of national and international agencies which fund, and provide guidance and base-level support for the Project. The GTAP website (www.gtap.agecon.purdue.edu), lists 20 institutions as members of the consortium.

The Institutions in the Consortium are: the Agricultural Economics Research Institute (LEI) in the Netherlands; the Australian Bureau of Agricultural and Resource Economics (ABARE) in Australia; the Centre d’Etudes Prospectives et d’Information Internationales (CEPII) in France; the Danish Research Institute of Food Economics (SJFI) in Denmark; the Productivity Commission in Australia; the Economic and Social Research Institute, Cabinet Office (ESRI) Japan; the Economic Research Service of the United States Department of Agriculture (ERS) in the US; the Federal Agricultural Research Centre (FAL) Braunschweig, Germany; the Food and Agriculture Organization of the United Nations (FAO); the Inter-American Development Bank (IDB) Washington DC; the World Bank; the International Food Policy Research Institute (IFPRI), Washington DC; the MIT Joint Program on the Science and Policy of Global Change Cambridge, MA, USA; the Netherlands Bureau of Economic Policy Analysis (CPB) at The Hague; the OECD, Environment Directorate Paris; the Research Institute of Economy, Trade and Industry (RIETI) in Japan; the United Nations Conference on Trade and Development (UNCTAD) in Geneva; the US Environmental Protection Agency in Washington DC; the US International Trade Commission (US-ITC); the World Trade Organization (WTO) in Geneva.

It is difficult for policy- and decision-makers and governments of countries - not engaged in econometric modelling, but faced with projections and outcomes, and recommendations based on such modelling exercises - not to wonder about other sectoral discordances in this and other data bases, and their effects on modelling, projections and outcomes.

Perhaps a safe starting point for them is to take outcomes of such modelling as at best giving possibly a very broad trend (and sound political economists using such models always make this point), and no more. A safer view would also be to view with scepticism any outcomes of econometric modelling presented in charts, tables and figures - even in academic publications - as certainties, akin perhaps to astrological predictions. – SUNS5639

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