Quantitative assessment of a free trade agreement between MERCOSUR and the European Union
AbstractUsing a GTAP CGE model/database, this paper assesses the possible effects of a free trade agreement (FTA); between the MERCOSUR and the European Union (EU);. The study takes into consideration the most important recent free trade agreements signed among the Latin American countries, as well as the latest European Union enlargements. With a 2004+ benchmark base scenario where tariffs were updated by the addition of information on trade agreements just signed by Latin American countries, two different policy simulations are addressed: (i); full liberalization, (ii); liberalization excluding sensitive products. The global CGE model allows analyzing direct and indirect socio-economic impacts on subscriber countries as well as on other countries in the region.From the point of view of the MERCOSUR countries, the results suggest that the FTA would be beneficial to foster their exports, especially in the case of Light manufactures. Imports to MERCOSUR from the EU would be increased, particularly in heavy manufactures sectors. In terms of GDP the results remain positive in the case of all the MERCOSUR countries in all simulated scenarios. However, welfare implications are unevenly distributed in favor of all the MERCOSUR countries in the simulated scenarios. The inclusion of sensitive products in the agreements seems to reduce the magnitude of the results but does not change the direction of the impacts. In any case, active public policies to mitigate the negative effects on sectors, enhance positive impacts and seize dynamic opportunities towards sustainable development must be undertaken. The main conclusion points out a potential complementary trade relationship among these two regions.
|Date of creation:||Apr 2010|
|Contact details of provider:|| Postal: Casilla 179-D, Santiago|
Fax: (56-2) 2210 2337
Web page: http://www.cepal.org
More information through EDIRC
References listed on IDEAS
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.:
- Terrie Walmsley, 1998.
"LONG-RUN SIMULATIONS WITH GTAP: Illustrative Results from APEC Trade Liberalisation,"
Centre of Policy Studies/IMPACT Centre Working Papers
ip-70, Victoria University, Centre of Policy Studies/IMPACT Centre.
- Walmsley, Terrie, 1998. "Long Run Simulations With GTAP: Illustrative Results from APEC Trade Liberalisation," GTAP Technical Papers 312, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
- Harrison, W Jill & Pearson, K R, 1996. "Computing Solutions for Large General Equilibrium Models Using GEMPACK," Computational Economics, Springer;Society for Computational Economics, vol. 9(2), pages 83-127, May.
- W. Jill Harrison & K.R. Pearson, 1994. "Computing Solutions for Large General Equilibrium Models Using GEMPACK," Centre of Policy Studies/IMPACT Centre Working Papers ip-64, Victoria University, Centre of Policy Studies/IMPACT Centre.
- Javorcik Beata Smarzynska & Wei Shang-Jin, 2003. "Pollution Havens and Foreign Direct Investment: Dirty Secret or Popular Myth?," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 3(2), pages 1-34, December.
- Javorcik, Beata & Wei, Shang-Jin, 2001. "Pollution Havens and Foreign Direct Investment: Dirty Secret or Popular Myth?," CEPR Discussion Papers 2966, C.E.P.R. Discussion Papers.
- Smarzynska, Beata K., 2001. "Pollution havens and foreign direct investment : dirty secret or popular myth?," Policy Research Working Paper Series 2673, The World Bank.
- Beata K. Smarzynska & Shang-Jin Wei, 2001. "Pollution Havens and Foreign Direct Investment: Dirty Secret or Popular Myth?," NBER Working Papers 8465, National Bureau of Economic Research, Inc.
- Renato G. Flores & Masakazy Watanuki, 2008. "Integration options for Mercosur : a quantitative analysis by the AMIDA model," INTAL Working Papers 1474, Inter-American Development Bank, INTAL.
- Renato G. Flôres Jr. & Masakazu Watanuki, 2008. "Integration Options for MERCOSUR: A Quantitative Analysis by the AMIDA Model," IDB Publications (Working Papers) 9287, Inter-American Development Bank.
- Germán Calfat & Renato G. Flôres, 2006. "The EU-Mercosol Free Trade Agreement: Quantifying Mutual Gains," Journal of Common Market Studies, Wiley Blackwell, vol. 44, pages 921-945, December.
- Calfat, Germán & Flôres Junior, Renato Galvão, 2004. "The EU-Mercosul free trade agreement: Quantifying mutual gains," FGV/EPGE Economics Working Papers (Ensaios Economicos da EPGE) 575, FGV/EPGE - Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).
- O'Ryan, Raúl & De Miguel, Carlos J. & Miller, Sebastian & Pereira, Mauricio, 2011. "The Socioeconomic and environmental effects of free trade agreements: a dynamic CGE analysis for Chile," Environment and Development Economics, Cambridge University Press, vol. 16(03), pages 305-327, June.
- Yvan Decreux & Lionel Fontagné, 2006. "A Quantitative Assessment of the Outcome of the Doha Development Agenda," Working Papers 2006-10, CEPII research center.
- Vaillant, Marcel, 2005. "MERCOSUR: Southern Integration under Construction," MPRA Paper 47251, University Library of Munich, Germany, revised Feb 2005.
- Schuschny, Andrés Ricardo & Durán Lima, José Elías & De Miguel, Carlos J., 2007. "El modelo GTAP y las preferencias arancelarias en América Latina y el Caribe: reconciliando su año base con la evolución reciente de la agenda de liberalización regional," Manuales 53, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
- Hertel, Thomas, 1997. "Global Trade Analysis: Modeling and applications," GTAP Books, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, number 7685.
- Mahrukh Doctor, 2007. "Why Bother With Inter-Regionalism? Negotiations for a European Union-Mercosur Agreement," Journal of Common Market Studies, Wiley Blackwell, vol. 45, pages 281-314, 06. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:ecr:col027:4774. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Biblioteca CEPAL)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.