Counterfactual analysis

The bank survey contains information on the costs of trade finance, the share of trade covered by trade finance and the trade finance gap. This information is used to generate projections of the trade effects of changes in the price and availability of trade finance. The WTO Global Trade Model (GTM), a computable general equilibrium model, is used to simulate the effects of changes in trade costs because of changes in the price and availability of trade finance. This annex describes the economic model employed, explores how the trade costs of financing international trade are modelled and outlines how trade finance shares and the costs of the trade finance instruments are calibrated in the baseline and counterfactuals.