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MERCOSUR’s External Agenda: It is adjusted to the needs of Paraguay? A general equilibrium approach

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  • Santander, Horacio

Abstract

Recent years have been characterized by low accomplishments in the external agenda of MERCOSUR. It has reflected more the interests of the foreign policy of Brazil, before the needs and characteristics of the other members of the block. Today it is clear that the block's foreign agenda is confused, because while priority is given to relationships south-south, the trade with developed countries is still growing in importance in the structure of the foreign trade block. Paraguay, with a strong predominance of the primary sector in their economic structure and highly dependent on foreign trade to continue growing faces the challenge of a foreign agenda imposed by MERCOSUR that does not adjust its needs. The simulation results, using the standard GTAP model, show that, with the exception of the negotiations with the EU, the benefits that derive from Paraguay relations with countries or regions included in the current foreign agenda of MERCOSUR are fewer than those which would be obtained if the block negotiates agreements with those countries that are an important part of its foreign trade and are outside the agenda of the block's foreign relationships.

Suggested Citation

  • Santander, Horacio, 2009. "MERCOSUR’s External Agenda: It is adjusted to the needs of Paraguay? A general equilibrium approach," Conference papers 331874, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    • Handle: RePEc:ags:pugtwp:331874
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    References listed on IDEAS

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    1. Hans Binswanger & Ernst Lutz, 2003. "Agricultural trade barriers, trade negotiations and the interests of developing countries," Chapters, in: John Toye (ed.), Trade and Development, chapter 8, Edward Elgar Publishing.
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