Date of Award

2019

Document Type

Thesis

Degree Name

Master of Science (MS)

First Advisor

Dr. Osei-Agyemang Yeboah

Abstract

Policies implemented to govern trade between two or more countries have proved vital as it affects the economies of nations. Political inputs into trade certainly establish effects that impact the livelihood of people in the economy. Every sector in an economy faces its impacts when there are changes in trade agreements. The extent to which this impact is always significant to note as it helps to determine the sustainability of trade agreements, which in turn sets the path for sectorial and national developments. This study utilizes the Computable General Equilibrium modeling to predict the impact of the United States-Mexico-Canada Agreement (USMCA) on the U.S. beef sector. Static specific factors model with competitive production with the assumptions of full employment, constant returns, competitive pricing, and perfect labor mobility across industries were employed to determine impacts. Factor shares and industry shares were extracted from factor payments, which constituted the substitution matrix. Factor shares are payments going to productive factors, and industry shares are the portions of factors employed by the industry. The model uses labor data for four skilled groups (managers, professionals, service workers, and production workers) across the manufacturing, services, rest of agriculture, and beef sectors. Capital receives the residual value added after the Labor and Energy bills. Capital for manufacturing is in stock measurement. The model was simulated with various vectors of price changes due to the repeal of COOL and general price changes that may occur due to the USMCA as estimated by the IMF. Even though USMCA would provide a beneficial impact to the U.S. in general as predicted by several studies, the results of this study show that the beef industry would experience economic decline both in the short and long run. Further studies are recommended to boost output and returns to capital in the U.S. beef sector.

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