IDEAS home Printed from https://ideas.repec.org/p/lnz/wpaper/20071001.html
   My bibliography  Save this paper

Economic Implications of an Association Agreement between the European Union and Central America

Author

Listed:
  • Luis Rivera

    (CLACDS-INCAE)

  • Hugo Rojas-Romagosa

    (CPB (the Hague))

Abstract

Using a global CGE model, we assess the potential macro-economic effects of a future European Union - Central American Association Agreement (EU-CAAA). Currently, many agricultural products from Central America (CA) enter duty-free to the European Union (EU); with two notable exceptions: bananas and sugar. We find that liberalizing the access to both products will bring significant gains to CA, while excluding them from the negotiations will bring no static gains. If trade facilitation mechanisms are implemented and we allow for the expected increase in FDI inflows to CA, welfare gains improve for all scenarios but are conditions on the level of EU agricultural liberalization.

Suggested Citation

  • Luis Rivera & Hugo Rojas-Romagosa, 2007. "Economic Implications of an Association Agreement between the European Union and Central America," IIDE Discussion Papers 20071001, Institue for International and Development Economics.
  • Handle: RePEc:lnz:wpaper:20071001
    as

    Download full text from publisher

    File URL: http://www.i4ide.org/content/wpaper/dp20071001.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Anne O. Krueger, 1983. "Trade and Employment in Developing Countries, Volume 3: Synthesis and Conclusions," NBER Books, National Bureau of Economic Research, Inc, number krue83-1.
    2. Koujianou Goldberg, Pinelopi & Pavcnik, Nina, 2003. "The response of the informal sector to trade liberalization," Journal of Development Economics, Elsevier, vol. 72(2), pages 463-496, December.
    3. Alice Amsden & Rolph van der Hoeven, 1996. "Manufacturing output, employment and real wages in the 1980s: Labour's loss until the century's end," Journal of Development Studies, Taylor & Francis Journals, vol. 32(4), pages 506-530.
    4. Anne O. Krueger, 1983. "Trade and Employment in Less Developed Countries: The Questions," NBER Chapters, in: Trade and Employment in Developing Countries, Volume 3: Synthesis and Conclusions, pages 1-9, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Nelson B. Villoria, 2009. "China and the Manufacturing Terms-of-Trade of African Exporters," Journal of African Economies, Centre for the Study of African Economies, vol. 18(5), pages 781-823, November.
    2. Rivera, Luis & Rojas-Romagosa, Hugo, 2010. "Formación de capital humano y el vínculo entre comercio y pobreza: los casos de Costa Rica y Nicaragua," Documentos de Proyectos 3814, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    3. Moreno ROMA & Paul HIEBERT, 2010. "Relative House Price Dynamics Across Euro Area and US Cities: Convergence or Divergence?," EcoMod2010 259600143, EcoMod.
    4. Rivera, Luis & Rojas-Romagosa, Hugo, 2009. "Human Capital Formation and the Linkage between Trade and Poverty: The Cases of Costa Rica and Nicaragua," Conference papers 331887, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    5. Sánchez , Marco V. & Vos, Rob, 2007. "Domestic Linkages as a Condition for Gains from Free Trade Agreements: Welfare and Poverty implications of DR-CAFTA for Costa Rica and Nicaragua," Conference papers 331618, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    6. Kakali Mukhopadhyay & Paul J. Thomassin & Debesh Chakraborty, 2012. "Economic Impact of Freer Trade in Latin America and the Caribbean: A GTAP Analysis," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 49(2), pages 147-183, November.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Özlem Onaran & Engelbert Stockhammer, 2006. "The effect of FDI and foreign trade on wages in the Central and Eastern European Countries in the post-transition era: A sectoral analysis," Department of Economics Working Papers wuwp094, Vienna University of Economics and Business, Department of Economics.
    2. Julien Gourdon, 2011. "Wage inequality in developing countries: South–South trade matters," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 58(4), pages 359-383, December.
    3. Sebastian Edwards & Thomas O. Enders & Jesus Silva-Herzog, 1988. "The United States and Foreign Competition in Latin America," NBER Chapters, in: The United States in the World Economy, pages 9-77, National Bureau of Economic Research, Inc.
    4. Hoekman & Bernard & Winters, L. Alan, 2005. "Trade and employment : stylized facts and research findings," Policy Research Working Paper Series 3676, The World Bank.
    5. Gérard Grellet, 1988. "Stratégies d'industrialisation pour l'Afrique noire," Revue Tiers Monde, Programme National Persée, vol. 29(115), pages 1007-1019.
    6. repec:unu:wpaper:wp201558 is not listed on IDEAS
    7. repec:unu:wpaper:wp2015-58 is not listed on IDEAS
    8. Jorge Saba Arbache, 2001. "Trade Liberalisation and Labor Markets in Developing Countries: Theory and Evidence," Studies in Economics 0112, School of Economics, University of Kent.
    9. Edward Tower, 1986. "Industrial Policy In Less Developed Countries," Contemporary Economic Policy, Western Economic Association International, vol. 4(1), pages 23-35, January.
    10. José Gabriel Palma, 2014. "Has the income share of the middle and upper-middle been stable over time, or is its current homogeneity across the world the outcome of a process of convergence? The 'Palma Ratio' revisited," Cambridge Working Papers in Economics 1437, Faculty of Economics, University of Cambridge.
    11. D. M. Nachane & Prasad Ranade, 1998. "India's trade balance in the 1980s an econometric analysis," Applied Economics, Taylor & Francis Journals, vol. 30(6), pages 761-774.
    12. Chong‐Hyun Nam, 2008. "Does Trade Expansion Still Promote Employment in Korea?," The World Economy, Wiley Blackwell, vol. 31(6), pages 720-737, June.
    13. Tony Addison & Finn Tarp, 2015. "Lessons for Japanese foreign aid from research on aid's impact," WIDER Working Paper Series 058, World Institute for Development Economic Research (UNU-WIDER).
    14. Harrison, Ann & Hanson, Gordon, 1999. "Who gains from trade reform? Some remaining puzzles," Journal of Development Economics, Elsevier, vol. 59(1), pages 125-154, June.
    15. Tony Addison & Finn Tarp, 2015. "Lessons for Japanese Foreign Aid from Research on Aid's Impact," WIDER Working Paper Series wp-2015-058, World Institute for Development Economic Research (UNU-WIDER).
    16. Alberto Posso & Aaron Soans, 2014. "The rise of the machines: Capital imports and real manufacturing wages in 57 nations," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 23(6), pages 862-877, September.
    17. Fischer, Justina A.V., 2012. "Globalization and Political Trust," Papers 285, World Trade Institute.
    18. José Gabriel Palma, 2014. "Has the Income Share of the Middle and Upper-middle Been Stable around the ‘50/50 Rule’, or Has it Converged towards that Level? The ‘Palma Ratio’ Revisited," Development and Change, International Institute of Social Studies, vol. 45(6), pages 1416-1448, November.
    19. Atencio-De-Leon, Andrea & Lee, Munseob & Macaluso, Claudia, 2023. "Does Turnover Inhibit Specialization? Evidence from a Skill Survey in Peru," IZA Discussion Papers 16671, Institute of Labor Economics (IZA).
    20. Salwa Trabelsi, 2019. "The governance threshold effect on the relationship between public education financing and income inequality," Economics Bulletin, AccessEcon, vol. 39(2), pages 1057-1075.
    21. Ana Paula MARTINS, 2014. "The Mechanics of Dualistic Models: "Comparable" Structures and Comparative Statics Results," Journal of Economics and Political Economy, KSP Journals, vol. 1(2), pages 150-185, December.
    22. Patricio Meller & Andrea Tokman, 1996. "Apertura comercial y diferencial salarial en Chile," Coyuntura Económica, Fedesarrollo, September.

    More about this item

    Keywords

    EU-CAAA FTA; trade policy; free trade agreement; CGE models; bananas; sugar;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration
    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:lnz:wpaper:20071001. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: iide webmaster (email available below). General contact details of provider: https://edirc.repec.org/data/siidenl.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.