Integration of the Americas : welfare effects and options for the MERCOSUR
Date
2003
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Abstract
The purpose of this paper is to assess the costs and benefits of the creation of the Free
Trade Area of the Americas (FTAA) and other integration options for the MERCOSUR
with the other countries in the hemisphere. The GTAP, a multiregional, multisector CGE
model is used to simulate the effects of several scenarios that are currently on debate.
The existing preferences, granted by previous agreements under the framework of the Latin
American Integration Association (LAIA), and the preferential treatment granted by the
USA through the Generalized System of Preferences (GSP), the Caribbean Basin Initiative
(CBI) and the Andean Trade Preference Act (ATPA) are taken into account. The analysis
decomposes the effects of the FTAA in order to assess the importance of market opening
and market access and identifies the net effect of trade creation and trade diversion.
Additionally, the FTAA initiative is decomposed in possible subregional agreements
among the countries involved (MERCOSUR – Andean Community, MERCOSUR – USA,
etc.). The assessment includes the estimation of the welfare effects in case the agreement
does not include the agricultural sector. All the results are presented for the MERCOSUR
as a bloc and for each of its members.
Description
Includes abstract in Spanish
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Policy Brief
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Keywords
ENTREPRENEURSHIP, INNOVATION, HIGH GROWTH ENTREPRENEURS, SMES, ENTREPRENEURSHIP POLICIES, COST BENEFIT ANALYSIS, FREE TRADE AREAS, INTERREGIONAL TRADE, TRADE NEGOTIATIONS, TARIFF POLICY, ACCESS TO MARKETS, MERCOSUR