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Trade Liberalization in Latin America and Eastern Europe: the Cases of Ecuador and Slovenia

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Author Info

  • (Stanley) Cho, Sang-Wook

    ()
    (University of New South Wales)

  • P. Díaz, Julián

    ()
    (Bowdoin College)

Abstract

We analyze the potential effects of ongoing trade reforms: Ecuador signing an FTA with the US, and Slovenia joining the EU. We construct a static Applied General Equilibrium Model and perform numerical experiments eliminating all import tariffs. Based on Input-Output tables, we construct Social Accounting Matrices for each country for calibration. Additional experiments are performed: sensitivity analyses on the trade elasticities, partial liberalizations, fiscal impacts of eliminating tariff revenues, and an alternative Slovenian liberalization framework. We find that both countries benefit from these reforms, with import prices falling and exports rising. However, different arrangements of trade liberalization have different implications on trade and welfare patterns.

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Bibliographic Info

Article provided by Center for Economic Integration, Sejong University in its journal Journal of Economic Integration.

Volume (Year): 23 (2008)
Issue (Month): ()
Pages: 1002-1045

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Handle: RePEc:ris:integr:0462

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Web page: http://econo.sejong.ac.kr/
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Related research

Keywords: trade liberalization; free trade agreement; customs union; fiscal policy; Ecuador; Slovenia;

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References

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  1. Timothy J. Kehoe, 2003. "An evaluation of the performance of applied general equilibrium models of the impact of NAFTA," Staff Report 320, Federal Reserve Bank of Minneapolis.
  2. Timothy J. Kehoe, 1996. "Social accounting matrices and applied general equilibrium models," Working Papers 563, Federal Reserve Bank of Minneapolis.
  3. Shoven, John B & Whalley, John, 1984. "Applied General-Equilibrium Models of Taxation and International Trade: An Introduction and Survey," Journal of Economic Literature, American Economic Association, vol. 22(3), pages 1007-51, September.
  4. Hummels, David, 1999. "Toward a Geography of Trade Costs," GTAP Working Papers 1162, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
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Cited by:
  1. Sang‐Wook (Stanley) Cho & Julian P. Diaz, 2011. "The Welfare Impact Of Trade Liberalization," Economic Inquiry, Western Economic Association International, vol. 49(2), pages 379-397, 04.

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