Economic perspectives for Central America after CAFTA; a GTAP-based analysis

Hugo Rojas-Romagosa, Joseph Francois and L. Rivera

No 99, CPB Discussion Paper from CPB Netherlands Bureau for Economic Policy Analysis

Abstract: Using a GTAP CGE application, we assess the main economic results of CAFTA for Central America (CA). Currently, Central America enjoys preferential access to the US market through the Caribbean Basin Initiative (CBI). CAFTA will consolidate and augment these concessions. Meanwhile, the agreement requires widespread opening of CA markets to US imports over time. The implementation of the ATC protocol in 2005 implies increased Chinese competition for the region in the textile and apparel sectors. CAFTA will balance for this new source of competition by allowing better access for CA textiles and apparel products, while creating large opportunities for labour market improvements and FDI inflows to Central America. If these opportunities are exploited, the region has much to gain from CAFTA. However, we also find a strong sectoral readjustment from agricultural sectors to maquila-based industries, which could create important adjustment strains.

JEL-codes: C68 F13 (search for similar items in EconPapers)
Date: 2008-02
New Economics Papers: this item is included in nep-cmp
References: Add references at CitEc
Citations: View citations in EconPapers (9)

Downloads: (external link)
https://www.cpb.nl/sites/default/files/publicaties ... p-based-analysis.pdf (application/pdf)

Related works:
Working Paper: Economic Perspectives for Central America after CAFTA: A GTAP-based Analysis (2006)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpb:discus:99

Access Statistics for this paper

More papers in CPB Discussion Paper from CPB Netherlands Bureau for Economic Policy Analysis Contact information at EDIRC.
Bibliographic data for series maintained by ().