THE ECONOMIC EFFECTS ON NAFTA OF TRANS-ATLANTIC FREE TRADE AGREEMENTS

ISLAM Sadequl

Applied Econometrics and International Development, 2011, vol. 11, issue 1

Abstract: This paper investigates the effects of a bilateral free trade agreement between Canada and the European Union and the effects of a free trade agreement between the European Union and NAFTA on various trade related variables in NAFTA countries, the European Union , and other countries. The paper primarily relies on the Global Trade Analysis Project(GTAP) model and database, version 7. Two policy experiments are considered : 1) Elimination of all tariffs and export subsidies for all goods and services involving Canada and the European Union; and 2) Elimination of all tariffs and export subsidies for all goods and services involving NAFTA countries and the European Union. The main findings are : 1) A Canada-EU free trade deal will increase the economic welfare in Canada and the European Union with adverse effects on other regions, notably the United States and 2) a NAFTA-EU free trade agreement will increase the economic welfare of the United States and the European Union but reduce that of Canada, Mexico and other regions notably, China.

Keywords: NAFTA; European Union; General equilibrium; free trade agreements (search for similar items in EconPapers)
JEL-codes: F1 (search for similar items in EconPapers)
Date: 2011
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