Study of the impact of the Economic Partnership Agreement on customs revenue and domestic taxation

ECOPA led this 3-person EC-funded assignment on the quantitative evaluation of the impact of the Economic Partnership Agreement (a Free Trade Agreement between the EU and Central Africa) in Cameroon. The study relied on a macroeconomic dynamic Computable General Equilibrium model of the economy of Cameroon, including a detailed external trade module. The model provided an evaluation of the impact of the EPA in terms of customs revenues, investment, growth, supply, GDP and employment, and household welfare. It includes a detailed sectoral analysis with 42 sectors and goods, allowing for a focused analysis of the impact of the APE on sectors and consumption/welfare.

The models also included a fully-fledged micro-simulation module based on detailed household data from the government survey of 2001, allowing for a grounded analysis of the poverty impact of the envisaged trade shocks. Household demand functions are estimated for each of 42 goods and each of the household types through a micro-econometric analysis based on this survey. Accompanying measures were proposed, particularly with regards to domestic taxation (as opposed to taxes on international trade).

For the European Commission (2008).