TTIP modelling

Question for written answer E-010292/2014 to the Commission

Rule 130

Julie Girling (ECR)

Subject:       TTIP modelling

  1.     Can the Commissioner comment on the model chosen for the TTIP impact assessment, and, in particular, why it was chosen to the exclusion of other models?
  2.     Can the Commissioner comment on the assertions made in a paper published recently by an American university, in which the authors claim that the model is inaccurate? The authors use the United Nations Global Policy Model instead, which gives ‘dramatically different results’[1].




Answer given by Ms Malmström

  • n behalf of the Commission
  1. 1.2015)

The Centre for Economic Policy Research (CEPR), which was responsible for the study that informed the Commission’s TTIP impact assessment, based its analysis on a state-of-the-art computable-general equilibrium (CGE) methodology. The Commission is confident that the CEPR analysis is robust. An assessment of the CEPR report requested by the European Parliament from an independent team of researchers found it to be of high quality. The fact that the CEPR results are generally in the middle of the range of those put forward by the majority of the studies on TTIP conducted so far provides additional confidence about the methodology.

Inevitably there are limitations to the CEPR analysis and therefore the Commission is open to consider the work of other researchers who experiment with new methods. However, unless and until these methodologies have been validated as being reliable tools the Commission is reluctant to rely upon their results in its policy-making. The study based on the United Nations’ Global Policy Model provides a good example for why caution is needed when using alternative non-standard methodological approaches. That model was originally developed by United Nations for analysing a number of global macroeconomic issues but it is not suited for trade policy analysis. It has no information on trade policy variables such as tariffs and other trade costs and it does not contain sufficient sectorial detail to capture the workings of trade policy changes. Therefore the Commission does not believe that it can be used to draw robust conclusions about the impact of TTIP. It is also relevant to know that, when it comes to trade policy analyses, the UN agencies also rely on CGE models similar to the one used in CEPR study on TTIP.