IDEAS home Printed from https://ideas.repec.org/a/eaa/aeinde/v11y2011i1_7.html
   My bibliography  Save this article

The Economic Effects On Nafta Of Trans-Atlantic Free Trade Agreements

Author

Listed:
  • Sadequl ISLAM

Abstract

This paper investigates the effects of a bilateral free trade agreement between Canada and the European Union and the effects of a free trade agreement between the European Union and NAFTA on various trade related variables in NAFTA countries, the European Union , and other countries. The paper primarily relies on the Global Trade Analysis Project(GTAP) model and database, version 7. Two policy experiments are considered : 1) Elimination of all tariffs and export subsidies for all goods and services involving Canada and the European Union; and 2) Elimination of all tariffs and export subsidies for all goods and services involving NAFTA countries and the European Union. The main findings are : 1) A Canada-EU free trade deal will increase the economic welfare in Canada and the European Union with adverse effects on other regions, notably the United States and 2) a NAFTA-EU free trade agreement will increase the economic welfare of the United States and the European Union but reduce that of Canada, Mexico and other regions notably, China.

Suggested Citation

  • Sadequl ISLAM, 2011. "The Economic Effects On Nafta Of Trans-Atlantic Free Trade Agreements," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 11(1).
    • Handle: RePEc:eaa:aeinde:v:11:y:2011:i:1_7
    as

    Download full text from publisher

    File URL: http://www.usc.es/economet/reviews/aeid1117.pdf
    Download Restriction: No.
    ---><---

    References listed on IDEAS

    as
    1. Islam, Sulequl, 2003. "Expansions of the European Union and the NAFTA: Implications for New and Non-Member countries," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 3(2).
    2. Richard E. Baldwin, 2011. "Multilateralising Regionalism: Spaghetti Bowls as Building Blocks on the Path to Global Free Trade," Chapters, in: Miroslav N. Jovanović (ed.), International Handbook on the Economics of Integration, Volume I, chapter 2, Edward Elgar Publishing.
    3. Thomas L. Vollrath & Mark J. Gehlhar & Charles B. Hallahan, 2009. "Bilateral Import Protection, Free Trade Agreements, and Other Factors Influencing Trade Flows in Agriculture and Clothing," Journal of Agricultural Economics, Wiley Blackwell, vol. 60(2), pages 298-317, June.
    4. Nathan S. Balke & Robert J. Gordon, 1986. "The Estimation of Prewar GNP Volatility, 1869-1938," NBER Working Papers 1999, National Bureau of Economic Research, Inc.
    5. Lee, Hiro & Owen, Robert F. & van der Mensbrugghe, Dominique, 2009. "Regional integration in Asia and its effects on the EU and North America," Journal of Asian Economics, Elsevier, vol. 20(3), pages 240-254, May.
    6. Ibarra-Yunez, Alejandro, 2003. "Spaghetti regionalism or strategic foreign trade: some evidence for Mexico," Journal of Development Economics, Elsevier, vol. 72(2), pages 567-584, December.
    7. Carlo Perroni & John Whalley, 2000. "The new regionalism: trade liberalization or insurance?," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 33(1), pages 1-24, February.
    8. Richard E. Baldwin, 2006. "Multilateralising Regionalism: Spaghetti Bowls as Building Blocs on the Path to Global Free Trade," The World Economy, Wiley Blackwell, vol. 29(11), pages 1451-1518, November.
    9. Richard Baldwin, 2008. "Big-Think Regionalism: A Critical Survey," NBER Working Papers 14056, National Bureau of Economic Research, Inc.
    10. Maurice Schiff & L. Alan Winters, 2003. "Regional Integration and Development," World Bank Publications - Books, The World Bank Group, number 15172, December.
    11. Fabienne Femenia & Alexandre Gohin, 2009. "On the European Responsibility in the Agricultural Multilateral Trade Negotiations: Modelling the Impacts of the Common Agricultural Policy," The World Economy, Wiley Blackwell, vol. 32(10), pages 1434-1460, October.
    12. Fernández, Raquel, 1997. "Returns to Regionalism: An Evaluation of Non-traditional Gains from RTAs," CEPR Discussion Papers 1634, C.E.P.R. Discussion Papers.
    13. Baier, Scott L. & Bergstrand, Jeffrey H., 2009. "Estimating the effects of free trade agreements on international trade flows using matching econometrics," Journal of International Economics, Elsevier, vol. 77(1), pages 63-76, February.
    14. Jayant Menon, 2009. "Dealing with the Proliferation of Bilateral Free Trade Agreements," The World Economy, Wiley Blackwell, vol. 32(10), pages 1381-1407, October.
    15. Anne O. Krueger, 1999. "Trade Creation and Trade Diversion Under NAFTA," NBER Working Papers 7429, National Bureau of Economic Research, Inc.
    16. Soo Yuen Chong & Jung Hur, 2008. "Small Hubs, Large Spokes and Overlapping Free Trade Agreements," The World Economy, Wiley Blackwell, vol. 31(12), pages 1625-1665, December.
    17. John Whalley, 1998. "Why Do Countries Seek Regional Trade Agreements?," NBER Chapters, in: The Regionalization of the World Economy, pages 63-90, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Islam, Sadequl, 2010. "The Economic Effects of Trans-Atlantic Free Trade Agreements," Conference papers 330247, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    2. Rukhsana Rasheed & Mazhr Nadeem Ishaq & Muhammad Imran, 2022. "A Performance Analysis of European Union Integration: The Prospects and Lessons for South Asia," iRASD Journal of Economics, International Research Alliance for Sustainable Development (iRASD), vol. 4(1), pages 69-77, March.
    3. Zakaria Sorgho, 2016. "RTAs' Proliferation and Trade-diversion Effects: Evidence of the ‘Spaghetti Bowl’ Phenomenon," The World Economy, Wiley Blackwell, vol. 39(2), pages 285-300, February.
    4. M. Ayhan Kose & Guy M. Meredith & Christopher M. Towe, 2005. "How Has NAFTA Affected the Mexican Economy? Review and Evidence," Springer Books, in: Rolf J. Langhammer & Lúcio Vinhas Souza (ed.), Monetary Policy and Macroeconomic Stabilization in Latin America, pages 35-81, Springer.
    5. Sorgho, Zakaria, 2014. "RTAs’ Proliferation and Trade-diversion effects: Evidence of the “Spaghetti Bowl” Phenomenon," MPRA Paper 60503, University Library of Munich, Germany.
    6. Sorgho, Zakaria, 2015. "RTAs' Proliferation and Trade-Diversion Effects: Evidence of the "Spaghetti Bowl" Phenomenon," Working Papers 206223, University of Laval, Center for Research on the Economics of the Environment, Agri-food, Transports and Energy (CREATE).
    7. Antoni Estevadeordal & Kati Suominen, 2008. "Sequencing Regional Trade Integration and Cooperation Agreements," The World Economy, Wiley Blackwell, vol. 31(1), pages 112-140, January.
    8. Jong Hee Park & Byung Koo Kim, 2020. "Why your neighbor matters: Positions in preferential trade agreement networks and export growth in global value chains," Economics and Politics, Wiley Blackwell, vol. 32(3), pages 381-410, November.
    9. Salazar-Xirinachs, Jose M., 2002. "Proliferation of sub-Regional Trade Agreements in the Americas: an assessment of key analytical and policy issues," Journal of Asian Economics, Elsevier, vol. 13(2), pages 181-212.
    10. Low, Patrick, 2014. "Preferentialism in Trade Relations: Challenges for the World Trade Organization," ADBI Working Papers 478, Asian Development Bank Institute.
    11. Kawai, Masahiro & Wignaraja, Ganeshan, 2011. "Asian FTAs: Trends, prospects and challenges," Journal of Asian Economics, Elsevier, vol. 22(1), pages 1-22, February.
    12. Hamanaka, Shintaro, 2012. "Evolutionary paths toward a region-wide economic agreement in Asia," Journal of Asian Economics, Elsevier, vol. 23(4), pages 383-394.
    13. Moser, Christoph & Rose, Andrew K., 2014. "Who benefits from regional trade agreements? The view from the stock market," European Economic Review, Elsevier, vol. 68(C), pages 31-47.
    14. Masahiro Kawai & Ganeshan Wignaraja, 2014. "Policy challenges posed by Asian free trade agreements: a review of the evidence," Chapters, in: Richard Baldwin & Masahiro Kawai & Ganeshan Wignaraja (ed.), A World Trade Organization for the 21st Century, chapter 8, pages 182-238, Edward Elgar Publishing.
    15. Sung Hee Lee & Kun Soo Park & Yong Won Seo, 2016. "Multinational Firm’s Production Decisions under Overlapping Free Trade Agreements: Rule of Origin Requirements and Environmental Regulation," Sustainability, MDPI, vol. 9(1), pages 1-16, December.
    16. Yongzheng Yang & Mr. Alvin Hilaire, 2003. "The United States and the New Regionalism/ Bilateralism," IMF Working Papers 2003/206, International Monetary Fund.
    17. Mikic, Mia, 2007. "Preferential trade agreements and agricultural trade liberalization in Asia and the Pacific," MPRA Paper 2947, University Library of Munich, Germany.
    18. Gabriel Felbermayr & Mario Larch & Finn Krüger & Lisandra Flach & Erdal Yalcin & Sebastian Benz, 2013. "Dimensionen und Auswirkungen eines Freihandelsabkommens zwischen der EU und den USA," ifo Forschungsberichte, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 62.
    19. Ioannis N. Kessides, 2012. "Regionalising Infrastructure for Deepening Market Integration: The Case of East Africa," Journal of Infrastructure Development, India Development Foundation, vol. 4(2), pages 115-138, December.
    20. NAGEL Daniel, 2017. "The Fate of 21st Century Multilateralism," European Journal of Interdisciplinary Studies, Bucharest Economic Academy, issue 02, June.

    More about this item

    Keywords

    NAFTA; European Union; General equilibrium; free trade agreements;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eaa:aeinde:v:11:y:2011:i:1_7. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: M. Carmen Guisan (email available below). General contact details of provider: http://www.usc.es/economet/eaa.htm .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.