The Free Trade Agreement between Chile and the EU: Its Potential Impact on Chile´s Export Industry
AbstractBilateral Free Trade Agreements (FTAs) and unilateral trade liberalization have been two strategies used extensively by Chile to expand its exports and improve its competitive position in the world markets. It is the objective of this paper to analyze the role of trade agreements, price competitiveness, real income, per capita income differences and transport costs in Chilean export trade with the EU. To this end, Chile’s most important export sectors, namely fish, fruit, beverages, ores, copper, and wood and products thereof are investigated using panel data from Chile’s main trading partners in the EU over the period 1988-2002. The econometric model used is a refined augmented gravity model. It is found that the FTA between Chile and the EU, if fish, fruit and wine were included, would have a noticeable impact on Chilean export performance. Price competitiveness is important in most of the sectors under investigation. As expected, the relevance and impact of transport costs on exports do vary from sector to sector.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Ibero-America Institute for Economic Research in its series Ibero America Institute for Econ. Research (IAI) Discussion Papers with number 125.
Length: 31 pages
Date of creation: 08 Nov 2005
Date of revision:
Contact details of provider:
Postal: Platz des Göttinger Sieben 3, 37073 Göttingen
Phone: 0049-551-39 81 72
Fax: 0049-551-39 81 73
Web page: http://www.iai.wiwi.uni-goettingen.de
More information through EDIRC
EU-Chile trade agreement; sectoral trade flows; gravity model; panel analysis;
Other versions of this item:
- NOWAK-LEHMANN D., Felicitas & HERZER, Dierk & VOLLMER, Sebastian, 2007. "The Free Trade Agreement Between Chile And The Eu: Its Potential Impact On Chile’S Export Industry," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 7(1).
- F14 - International Economics - - Trade - - - Empirical Studies of Trade
- F17 - International Economics - - Trade - - - Trade Forecasting and Simulation
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
This paper has been announced in the following NEP Reports:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- I-Hui Cheng & Howard J. Wall, 2005.
"Controlling for heterogeneity in gravity models of trade and integration,"
Federal Reserve Bank of St. Louis, issue Jan, pages 49-63.
- I-Hui Cheng & Howard J. Wall, 2004. "Controlling for heterogeneity in gravity models of trade and integration," Working Papers 1999-010, Federal Reserve Bank of St. Louis.
- Stock, James H & Watson, Mark W, 1993.
"A Simple Estimator of Cointegrating Vectors in Higher Order Integrated Systems,"
Econometric Society, vol. 61(4), pages 783-820, July.
- James H. Stock & Mark W. Watson, 1991. "A simple estimator of cointegrating vectors in higher order integrated systems," Working Paper Series, Macroeconomic Issues 91-3, Federal Reserve Bank of Chicago.
- Tom Doan, . "SWDOLS: RATS procedure to estimate cointegrating vectors using dynamic OLS," Statistical Software Components RTS00207, Boston College Department of Economics.
- James E. Anderson & Eric van Wincoop, 2001.
"Gravity with Gravitas: A Solution to the Border Puzzle,"
NBER Working Papers
8079, National Bureau of Economic Research, Inc.
- James E. Anderson & Eric van Wincoop, 2003. "Gravity with Gravitas: A Solution to the Border Puzzle," American Economic Review, American Economic Association, vol. 93(1), pages 170-192, March.
- James E. Anderson & Eric van Wincoop, 2000. "Gravity with Gravitas: A Solution to the Border Puzzle," Boston College Working Papers in Economics 485, Boston College Department of Economics.
- Laszlo Matyas, 1997. "Proper Econometric Specification of the Gravity Model," The World Economy, Wiley Blackwell, vol. 20(3), pages 363-368, 05.
- Spiros Bougheas & Panicos Demetriades & Edgar Morgenroth, 1996.
"Infrastructure, Transport Costs and Trade,"
Keele Department of Economics Discussion Papers (1995-2001)
96/7, Department of Economics, Keele University.
- Inmaculada Martínez-Zarzoso & Felicitas Nowak-Lehmann, 2003. "Augmented Gravity Model: An Empirical Application to Mercosur-European Union Trade Flows," Journal of Applied Economics, Universidad del CEMA, vol. 0, pages 291-316, November.
- Inmaculada Martínez-Zarzoso & Felicitas Nowak-Lehmann D., 2004. "Economic and Geographical Distance: Explaining Mercosur Sectoral Exports to the EU," Open Economies Review, Springer, vol. 15(3), pages 291-314, 07.
- Peter Egger, .
"A Note on the Proper Econometric Specification of the Gravity Equation,"
WIFO Working Papers
- Egger, Peter, 2000. "A note on the proper econometric specification of the gravity equation," Economics Letters, Elsevier, vol. 66(1), pages 25-31, January.
- James E. Anderson & Eric van Wincoop, 2004.
Journal of Economic Literature,
American Economic Association, vol. 42(3), pages 691-751, September.
- Limao, Nuno & Venables, Anthony J., 1999. "Infrastructure, geographical disadvantage, and transport costs," Policy Research Working Paper Series 2257, The World Bank.
- Soloaga, Isidro & Winters, L. Alan, 1999.
"Regionalism in the Nineties: What Effect on Trade?,"
CEPR Discussion Papers
2183, C.E.P.R. Discussion Papers.
- Soloaga, Isidro & Alan Wintersb, L., 2001. "Regionalism in the nineties: what effect on trade?," The North American Journal of Economics and Finance, Elsevier, vol. 12(1), pages 1-29, March.
- M. A. Mcpherson & M. R. Redfearn & M. A. Tieslau, 2000. "A Re-Examination of the Linder Hypothesis: A Random-Effects Tobit Approach," International Economic Journal, Taylor & Francis Journals, vol. 14(3), pages 123-136.
- Busse, Matthias, 2003. "Tariffs, Transport Costs and the WTO Doha Round: The Case of Developing Countries," Estey Centre Journal of International Law and Trade Policy, Estey Centre for Law and Economics in International Trade, vol. 4(1).
- Arie Arnon & Avia Spivak & J. Weinblatt, 1996. "The Potential For Trade Between Israel, The Palestinians and Jordan," The World Economy, Wiley Blackwell, vol. 19(1), pages 113-134, 01.
- Inmaculada Martínez-Zarzoso & Felicitas Nowak-Lehmann D., 2003. "Augmented gravity model: An empirical application to Mercosur- European trade flows," International Trade 0309019, EconWPA.
- Bergstrand, Jeffrey H, 1989. "The Generalized Gravity Equation, Monopolistic Competition, and the Factor-Proportions Theory in International Trade," The Review of Economics and Statistics, MIT Press, vol. 71(1), pages 143-53, February.
- Bergstrand, Jeffrey H, 1985. "The Gravity Equation in International Trade: Some Microeconomic Foundations and Empirical Evidence," The Review of Economics and Statistics, MIT Press, vol. 67(3), pages 474-81, August.
- Helpman, Elhanan, 1987. "Imperfect competition and international trade: Evidence from fourteen industrial countries," Journal of the Japanese and International Economies, Elsevier, vol. 1(1), pages 62-81, March.
- Shang-Jin Wei, 1996. "Intra-National versus International Trade: How Stubborn are Nations in Global Integration?," NBER Working Papers 5531, National Bureau of Economic Research, Inc.
- Fritz Breuss & Peter Egger, 1999. "How Reliable Are Estimations of East-West Trade Potentials Based on Cross-Section Gravity Analyses?," Empirica, Springer, vol. 26(2), pages 81-94, June.
- repec:hal:wpaper:halshs-00587677 is not listed on IDEAS
- Maria Bas & Ivan Ledezma, 2007.
"Trade integration in manufacturing: the Chilean experience,"
PSE Working Papers
- Bas, Maria & Ledezma, Ivan, 2009. "Trade Integration in Manufacturing : The Chilean Experience," Economics Papers from University Paris Dauphine 123456789/6912, Paris Dauphine University.
- Brieuc Monfort, 2008. "Chile: Trade Performance,Trade Liberalization, and Competitiveness," IMF Working Papers 08/128, International Monetary Fund.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sabine Jaep).
If references are entirely missing, you can add them using this form.