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Intra-Regional vs. Extra-Regional Trade Liberalization in Central America

Author

Listed:
  • Adolfo Cristóbal Campoamor
  • Manuel Alejandro Cardenete Flores
  • Pedro Caldentey Del Pozo
  • Olexandr Nekhay

Abstract

Although the Central American countries trade very extensively with the USA, the remarkable growth of their intra-regional exports is prone to create more internal added value for the region. Taking this background into account, we use and compare a standard, perfectly competitive and an imperfectly competitive GTAP CGE model based on the GTAP 9 database, to assess different scenarios. Our simulations evaluate the elimination of all existing import taxes and export subsidies in 2011, both at the intra-regional level and vis-à-vis the USA. The results emphasize the preference by most of the Central American countries for the completion of the Customs Union at the expense of a deepening of the DR-CAFTA agreements.

Suggested Citation

  • Adolfo Cristóbal Campoamor & Manuel Alejandro Cardenete Flores & Pedro Caldentey Del Pozo & Olexandr Nekhay, 2020. "Intra-Regional vs. Extra-Regional Trade Liberalization in Central America," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 55(8), pages 1880-1892, July.
    • Handle: RePEc:mes:emfitr:v:55:y:2020:i:8:p:1880-1892
    DOI: 10.1080/1540496X.2018.1521802
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