Trade Distortion Indexes and Applied General Equilibrium Models: The Case of the Common Agricoltural Policy

In this paper, we build on the insights of the Trade Restrictiveness Index (TRI) approach by computing uniform tariff equivalents for the European Union primary sector using the Global Trade Analysis Project model and its associated data base. The main contribution of the paper is to extend and adapt the definition of the TRI, in order to make it consistent with the structure of a multi-regional Applied General Equilibrium model. In this perspective, we define a “modified TRI†based on the direct welfare evaluation (rather than on the Balance of trade function) and extend its definition in order to take into account the terms of trade impact. Finally, an empirical application of the index is provided with reference to two policy scenarios: the liberalization of the Common Agricultural Policy and the implementation of the “Agenda 2000†reform.