SRI LANKAN  JOURNAL OF  AGRICULTURAL ECONOMICS

Volume 16.  Number 1.  2014


A Quantitative Evaluation of the Potential Effects of Trade Policy Reversal in Sri Lanka: A Computable General Equilibrium Analysis
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Tilak Susantha Liyanaarachchi, Jayatilake S. Bandara and  Athula Naranpanawa   *

ABSTRACT

In recent years there has been a trend in rising protectionism and a
reversal of trade policy reforms in some developed and developing countries,
particularly after the global financial crisis. Although some researchers and
practitioners have discussed recent trends in trade policy reversal in both
developed and developing countries in recent years, no serious attempts have
been made to examine the effects of trade policy reversal in a developing
country within an economy-wide framework. The current paper attempts to
fill this research gap by answering the question: Can developing countries
benefit from trade policy reversals? The study focuses particularly on the case
of Sri Lanka. To address this central research aim the paper first reviews
recent trends in import duty and para-tariffs in Sri Lanka, particularly after
the global financial crisis. An economy-wide computable general equilibrium
(CGE) model was then used to evaluate the effects of trade policy reversal on
the Sri Lankan economy. The results of the Sri Lankan case study presented
suggest that developing countries will not benefit from trade policy reversal at
either the macro level or industry level.



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Authors are respectively,  PhD candidate, Associate Professor and Lecturer,  Department of Accounting,
Finance and Economics, Griffith Business School, Griffith University, Queensland 4111, Australia
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  Liyanaarachchi, Bandara and  Naranpanawa. 2014 , Sri Lankan Journal of Agricultural Economics. Volume 16 (1). Pp. 35 - 60

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