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Abstract
We assess the impact of a potential TTIP bilateral free trade agreement on the EU and
US bio-economies (feedstock, biofuels, by-products, and related competing crops) and major
trade partners in these markets. The analysis develops a multi-market model that incorporates
bilateral trade flows (US to EU, EU to US, and similarly with third countries) and is calibrated to
OECD-FAO baseline for 2013–2022 to account for recent policy decisions. The major policy
reforms from a TTIP involve tariff and TRQ liberalization and their direct contractionary impact
on US sugar supply, EU biofuel production, and indirect negative effect on US HFCS
production. EU sugar and isoglucose productions expand along with US ethanol and biodiesel
and oilseed crushing. EU sugar would flow to the US, US biofuels and vegetable oil to the EU.
We further quantify nontariff measures (NTM) affecting these trade flows between the EU and
the US. EU oilseed production contracts, and EU crushing expands with improving crushing
margins following reduced NTM frictions. Our analysis reveals limited net welfare gains with
most net benefits reaped by Brazil and not the two trading partners of the TTIP.