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The EU-Mercosul free trade agreement: Quantifying mutual gains

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  • Calfat, Germán
  • Flôres Junior, Renato Galvão

Abstract

We identify trade in goods opportunities in a EU-Mercosul free trade area. Gains for Mercosul are rather concentrated, being mostly associated to a few agricultural commodities nowadays facing high protection barriers. EU gains are evenly spread, comprising a variety of market penetration possibilities. Trade deviation by the EU products is never higher than trade creation, confirming their international competitiveness and signalling that a great distortion of Mercosul’s imports won’t take place. Balanced gains exist for both sides; for Mercosul, the agreement can act as a first serious trial for future liberalisations with other developed partners, and as a warning on needed competitiveness improvements.

Suggested Citation

  • 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, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil).
    • Handle: RePEc:fgv:epgewp:575
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    1. Philip C. Abbott, 2002. "Tariff-rate quotas: failed market access instruments?," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 29(1), pages 109-130, March.
    2. Baldwin, Richard E. & Venables, Anthony J., 1995. "Regional economic integration," Handbook of International Economics, in: G. M. Grossman & K. Rogoff (ed.), Handbook of International Economics, edition 1, volume 3, chapter 31, pages 1597-1644, Elsevier.
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    Cited by:

    1. Fernando de Holanda Barbosa, 2017. "Competitive Equilibrium Hyperinflation Under Rational Expectations," SpringerBriefs in Economics, in: Exploring the Mechanics of Chronic Inflation and Hyperinflation, chapter 0, pages 77-91, Springer.
    2. Boyer, Ivan & Schuschny, Andrés Ricardo, 2010. "Quantitative assessment of a free trade agreement between MERCOSUR and the European Union," Estudios Estadísticos 4774, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    3. Agramont, Daniel Agramont & Aliaga Lordemann, Javier, 2010. "Potential gains for Bolivia of the subscription of an association Agreement with the European Union," Revista Latinoamericana de Desarrollo Economico, Carrera de Economía de la Universidad Católica Boliviana (UCB) "San Pablo", issue 14, pages 127-161.
    4. Ariel A. Barraud & Author-Name: Ariel A. Barraud, 2011. "Exploring trade flows between MERCOSUR and the EU: what does an export demand function tell us?," Economic Analysis Working Papers (2002-2010). Atlantic Review of Economics (2011-2016), Colexio de Economistas de A Coruña, Spain and Fundación Una Galicia Moderna, vol. 2, pages 1-1, December.
    5. Honório Kume & Guida Piani & Pedro Miranda, 2005. "Índia-Mercosul: Perspectivas de um Acordo de Preferências Comerciais," Discussion Papers 1120, Instituto de Pesquisa Econômica Aplicada - IPEA.
    6. Barbosa, Fernando de Holanda, 2005. "The contagion effect of public debt on monetary policy: the brazilian experience," FGV EPGE Economics Working Papers (Ensaios Economicos da EPGE) 591, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil).
    7. Horowitz, Andrew W. & Flôres Junior, Renato Galvão, 2004. "Beyond indifferent players: on the existence of prisoners dilemmas in games with amicable and adversarial preferences," FGV EPGE Economics Working Papers (Ensaios Economicos da EPGE) 576, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil).
    8. Fl�res Jr, Renato G., 2013. "In Search of a Feasible EU-Mercosul Free Trade Agreement," CEPS Papers 7767, Centre for European Policy Studies.

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