This study introduces an improved global economic framework for investigating the impacts of climate change while focusing on local water constraints and international trade of agricultural products. This study measures the likely impacts of a counterfactual change in “irrigation yield gap” on irrigation expansion, groundwater withdrawal, surface water withdrawal, and international trade of agricultural commodities. We construct proposed economic framework based on GTAP (Global Trade Analysis Project) model, a widely used global model, to investigate various economic impacts. We extend GTAP Water Data Base (Haqiqi et al., 2016) by adding new global database on irrigation efficiency; introducing irrigation services as sectors; new global database of costs and returns of irrigation; introducing energy, capital, and labor inputs for water extraction and on-farm water distribution; distinguishing surface water from groundwater; and considering different irrigation technologies. We also introduce demand and supply of irrigation services by river basin AEZs (agro-ecological zones). Then, we calculate the likely impact of a counterfactual scenario of climate change (change in relative yields of irrigated and non-irrigated crops).