Mary Mitchell O'Connor (Dún Laoghaire, Fine Gael) | Oireachtas source

This question deals with technical economic modelling. The sustainability impact assessment, SIA, assesses the likely benefits of the Comprehensive Economic and Trade Agreement, CETA, and provides a comprehensive prediction on the impacts of the agreement. The study uses the so-called computable general equilibrium, CGE, model to simulate the impact of the CETA. These are standard tools for trade economists that create a computerised simulation of the world economy and model what happens when changes to tariffs and quotas are introduced. The CGE model used is state-of-the-art. It relies on assumptions about the economy in order to work, but these are as reasonable as possible to make it as close to the real world as possible. For example, the model is able to account for the effects of economies of scale, different skill levels of employees, imperfect competition between companies and many other features of the real world economy.

Like any model, the CGE model may have its limitations. The model gives us our best indication of the economic effects rather than precise predictions of exactly what will happen. However, alternatives to the CGE approach such as the study referred to by the Deputy have not yet proved to be sufficiently reliable for an ex anteanalysis of economy-wide effects of trade policy changes.

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