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The impact of trade liberalization on welfare of trade partners has been the subject of various economic studies, but components of welfare and their decomposition is considered by this study. The study of Huff and Hertel (2000) and the global trade analysis project constitute the theoretical basics of this research. First, by using the graphical approach, the distortion in labor market is investigated within a closed economy with two producing sectors. Than by using a mathematical approach, welfare effects will be decomposed using single and multi regions models. It is shown that various components affect welfare changes resulting from policy shocks. The effects of reduction in tariffs of imported agriculture commodities from Iran to WTO are examined. The results show that the Iran’s welfare rises because of positive contribution of allocative efficiency, terms of trade and tariff revenues. The changes in aggregate labor demand, investment and technology progress are the important elements in welfare changes due to trade policy, but in static models such as GTAP, these components are fixed, however the theoretical analysis shows that they may lead to welfare.       

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Iran's membership in Shanghai Cooperation Organization (SCO), in addition to political and security gains, can bring broad economic benefits. In this regard, in this research, the economic impacts of decreasing import tariffs of Iran and the Shanghai Cooperation Organization have been analyzed. In this study, empirical analysis and quantifying the results have been done regarding Global Trade Analysis Project (GTAP) model, as a computable general equilibrium CGE, and global and multi-regional model. Considering the international nature of analysis, a global model and database were required to achieve the purposes of this study, thus, version 10 of GTAP model and its database (published in 2020) was selected for analysis. In this research, the economic impacts (welfare, production, trade) of Iran's presence in the SCO in various economic sectors were analyzed in two scenarios (50% decrease and 100% decrease in bilateral tariffs). The results indicate that sector "Grains and Crops" in terms of high initial tariff rate, sector "Textiles and Clothing" in terms of high initial tariff rate, sector " Light Manufacturing" in terms of high initial tariff rate and sector " Heavy Manufacturing" due to high trade volume is the significant and influential sectors of Iran's membership in Shanghai Cooperation Organization. It is recommended that tariff rate changes of the mentioned sectors be performed with high accuracy. In general, the results indicate that the variables of welfare, production and trade are increasing in Iran.