The survey of the impacts of the preferential trade arrangement agreement between Iran and Venezuela
Subject Areas : Financial Economics
Mohammadreza MirzaeeNejad
1
(
Assistant Professor of Economics, Islamic Azad University Central Tehran Beanch
)
Yalda, Dehghqn
2
(
M.A. in Economics
)
Keywords: Trade Agreement, Smart model, Venezuela,
Abstract :
The economic convergence commitments have being signed increasingly since two past decades throughout the world. Nowadays, more than half of global trades have been occurred through these kind of commitments. In addition, almost every country is a member of these sorts of commitments. In this paper, the effects of decreasing tariff barriers on the trade flows, tariff revenues, and trade balance are simulated when the Iran-Venezuela Preferential Trade Arrangement (PTA) be established. These effects are simulated by using a partial equilibrium model so called SMART. The results show that the establishment of such arrangement causes expanding trade volume of Iran. Besides, the Iran's trade related to Venezuela's one gets excess because of its exports increasing related to its imports. Overall tariff reduction is simulated under two different scenarios, 70 and 500 percent. In both situations, hot water steam boiler, nuclear reactors, mechanical machineries, vehicles, iron and steal products, various chemical industries and fruits are the most determinations with regard to the concept of creation and diversion trade. Furthermore, these products have the most effects on Iran's exports to Venezuela. On the other hand, raw steel and cast iron are the most impressive imports of Iran from Venezuela
