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Trade Policy and Export Diversification: What Should Colombia Expect from the FTA with the United States

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  • Christian Volpe Martincus
  • Sandra Milena Gómez
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    Abstract

    According to the economic theory and recent empirical evidence, improved market access through trade arrangements is likely to favor export diversification. In this paper, we assess whether this has been the case of Colombian exports to the United States and whether an FTA with the United States would help Colombia to diversify their exports. We find that lower tariffs have indeed favored exports of new products from Colombia. Predictions suggest that the FTA is likely to induce further diversification, but up to a certain point.

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    Bibliographic Info

    Paper provided by Inter-American Development Bank in its series IDB Publications with number 9292.

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    Date of creation: Dec 2009
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    Handle: RePEc:idb:brikps:9292

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    Keywords: Trade Agreements; Integration & Trade; Globalization & Regionalization; IDB-WP-136;

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