Copenhagen Economics has been commissioned by the Danish energy agency to propose how to model foreign trade in the general equlibrium model IntERACT, which is currently being developed by the agency. First, the study outlines pros and cons of presently applied alternative solutions. Second, the study proposes a novel approach for modelling foreign trade. One which incorporates trade barriers and switching points, where trade patterns change abruptly, as a result of  relocation of production due to loss of competiveness. Finally, the study includes a full description of the variables, parameters and equations of the model, it provides a discussion on calibration in general and a discussion of parameterization of industries exposed to relocation.   You can read the report here     For more information, please contact Partner, Sigurd Næss-Schmidt