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Economic Implications of an Association Agreement between the European Union and Central America

Luis Rivera () and Hugo Rojas-Romagosa ()
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Luis Rivera: CLACDS-INCAE

No 20071001, IIDE Discussion Papers from Institue for International and Development Economics

Abstract: Using a global CGE model, we assess the potential macro-economic effects of a future European Union - Central American Association Agreement (EU-CAAA). Currently, many agricultural products from Central America (CA) enter duty-free to the European Union (EU); with two notable exceptions: bananas and sugar. We find that liberalizing the access to both products will bring significant gains to CA, while excluding them from the negotiations will bring no static gains. If trade facilitation mechanisms are implemented and we allow for the expected increase in FDI inflows to CA, welfare gains improve for all scenarios but are conditions on the level of EU agricultural liberalization.

Keywords: EU-CAAA FTA; trade policy; free trade agreement; CGE models; bananas; sugar (search for similar items in EconPapers)
JEL-codes: F13 F15 C68 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2007-10
New Economics Papers: this item is included in nep-agr, nep-cmp, nep-eec and nep-int
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Persistent link: https://EconPapers.repec.org/RePEc:lnz:wpaper:20071001

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