Computational Analysis of the U.S FTAs with Central America, Australia, And Morocco
AbstractWe use the Michigan Model of World Production and Trade to assess the economic effects of the U.S. bilateral FTAs negotiated with Central America, Australia, and Morocco. The model covers 18 economic sectors in each of 22 countries/regions and is based on Version 5.4 of the GTAP database for 1997 together with specially constructed estimates of services barriers and other data on sectoral employment and numbers of firms. The distinguishing feature of the model is that it incorporates monopolistic competition in the manufacturing and services sectors, including increasing returns and product variety. The modeling focus is on the effects of the bilateral removal of tariffs on agriculture and manufactures and services barriers. Rules of origin and other restrictive measures and the non-trade aspects of the FTAs are not taken into account due to data constraints. The computational results indicate that the benefits of bilateral FTAs for the United States and partner countries are rather small in both absolute and relative terms, and that far greater benefits could be realized if the United States and its FTA partners adopted unilateral free trade and especially if multilateral free trade was adopted by all countries/regions in the global trading system.
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Bibliographic InfoPaper provided by Research Seminar in International Economics, University of Michigan in its series Working Papers with number 527.
Length: 51 pages
Date of creation: 2005
Date of revision:
Free Trade Agreements; Unilateral Liberalization; Multilateral Liberalization;
Other versions of this item:
- Drusilla K. Brown & Kozo Kiyota & Robert M. Stern, 2005. "Computational Analysis of the US FTAs with Central America, Australia and Morocco," The World Economy, Wiley Blackwell, vol. 28(10), pages 1441-1490, October.
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
- F10 - International Economics - - Trade - - - General
- F15 - International Economics - - Trade - - - Economic Integration
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