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Free trade agreements with the United States : what's in it for Latin America?


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  • Erzan, Refik
  • Yeats, Alexander


Unlike earlier analysts, who have focused on U.S. objectives, the authors focus here on what 11 Latin American countries (Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Mexico, Paraguay, Peru, Uruguay, and Venezuela) stand to gain from a preferential removal of U.S. trade barriers - that is, from the development of a free trade area (FTA) arrangement. They find that the United States is limited in its ability to extend significant FTA preferences to most Latin American countries because of the existing Generalized System of Preferences and the cuts in import duties negotiated in such previous multilateral trade negotiations as the Tokyo Round. They do not formally project the potential FTA-induced expansion of U.S. exports, but do make some detailed comparisons of the levels of tariff and nontariff protection in the U.S. and Latin American markets. Those comparisons suggest that the U.S. trade gains - particularly for highly protected transport and machinery products - are likely to be considerably greater than those for Latin America in the U.S. market. Their analysis also accents the potential dangers associated with independent negotiation of FTAs. Agreements that extend preferences to U.S. products below tariffs paid by other countries in the region would have a serious negative impact on trade among Latin American countries. Finally, the authors note that a successful conclusion of the Uruguay Round could greatly affect their projections.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 827.

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Date of creation: 31 Jan 1992
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Handle: RePEc:wbk:wbrwps:827

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Keywords: TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT; Trade Policy; Economic Theory&Research; Environmental Economics&Policies; Trade and Regional Integration;

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  1. André Sapir & Robert Baldwin, 1983. "India and the Tokyo round," ULB Institutional Repository 2013/8274, ULB -- Universite Libre de Bruxelles.
  2. Yeats, Alexander J., 1984. "On the analysis of tariff escalation : Is there a methodological bias against the interest of developing countries?," Journal of Development Economics, Elsevier, vol. 15(1-3), pages 77-88.
  3. Finger, J M & Kreinin, M E, 1979. "A Measure of 'Export Similarity' and Its Possible Uses," Economic Journal, Royal Economic Society, vol. 89(356), pages 905-12, December.
  4. Langhammer, Rolf J., 1983. "Problems and effects of a developing countries' tariff concession round on South-South trade," Kiel Working Papers 167, Kiel Institute for the World Economy.
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Cited by:
  1. de Melo, Jaime & Panagariya, Arvind & Rodrik, Dani, 1993. "The new regionalism : a country perspective," Policy Research Working Paper Series 1094, The World Bank.
  2. Safadi, Raed & Yeats, Alexander, 1993. "The North American Free Trade Agreement (NAFTA) : its effect on South Asia," Policy Research Working Paper Series 1119, The World Bank.
  3. Bhattacharya, Swapan K. & Bhattacharyay, Biswa N., 2007. "An empirical analysis on prospects and challenges of BIMSTEC-Japan trade integration," Journal of Asian Economics, Elsevier, vol. 18(3), pages 509-536, June.
  4. Swapan K. Bhattacharya & Biswanath Bhattacharyay, 2006. "Prospects of Regional Cooperation in Trade, Investment and Finance in Asia: An Empirical Analysis on BIMSTEC Countries and Japan," CESifo Working Paper Series 1725, CESifo Group Munich.
  5. Biswa N Bhattacharyay & Swapan K. Bhattacharya, 2010. "Free Trade Agreement between People’s Republic of China and India: Likely Impact and Its Implications to Asian Economic Community," Working Papers id:3272, eSocialSciences.
  6. Krissoff, Barry & Sharples, Jerry A., 1993. "Preferential Trading Arrangements In Western Hemisphere Countries," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 22(1), April.


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