Chile's Regional Arrangements and the Free Trade Agreement of the Americas The Importance of Market Access

July 2001 - Among Chile's bilateral regional agreements, only Chile's agreements with "Northern" partners provide enough market access to offset the costs to Chile of trade diversion. Because of preferential market access, however, "additive regionalism" is likely to pr...

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Bibliographic Details
Main Author: Tarr, David
Other Authors: Harrison, Glenn, Rutherford, Thomas
Format: eBook
Language:English
Published: Washington, D.C The World Bank 2001
Subjects:
Online Access:
Collection: World Bank E-Library Archive - Collection details see MPG.ReNa
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653 |a Macroeconomics and Economic Growth 
653 |a Market Access 
653 |a Global Free Trade 
653 |a International Economics & Trade 
653 |a Preferential Market Access 
653 |a Free Trade 
653 |a Additive Regionalism Strategy 
653 |a Additive Regionalism 
653 |a Trade Policy 
653 |a General Equilibrium Model 
653 |a Bilateral Free Trade Agreements 
653 |a Public Sector Development 
653 |a Law and Development 
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653 |a Trade Law 
653 |a Economic Theory and Research 
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520 |a July 2001 - Among Chile's bilateral regional agreements, only Chile's agreements with "Northern" partners provide enough market access to offset the costs to Chile of trade diversion. Because of preferential market access, however, "additive regionalism" is likely to provide Chile with far more gains than the static welfare gains from unilateral free trade. At least one partner country loses from each of the regional trade agreements considered in this study, and excluded countries always lose. The Free Trade Agreement of the Americas (FTAA) produces gains for almost all the member countries, but the European Union is a big loser. Countries of the Americas gain more in aggregate from global free trade than from the FTAA.  
520 |a  They estimate that the FTAA produces large welfare gains for the members, with the European Union being the big loser. Gains to the world from global free trade are estimated to be at least 36 times greater than gains from the FTAA. Even countries of the Americas in aggregate gain more from global free trade than from the FTAA. This paper—a product of Trade, Development Research Group—is part of a larger effort in the group to examine the impact of regional trade arrangements on development and poverty reduction. David Tarr may be contacted at dtarr@worldbank.org 
520 |a  Using a multisector, multicountry, computable general equilibrium model, Harrison, Rutherford, and Tarr examine Chile's strategy of negotiating bilateral free trade agreements with all of its significant trading partners (referring to this policy as additive regionalism). They also evaluate the Free Trade Agreement of the Americas (FTAA) and global free trade. Among Chile's bilateral regional agreements, only Chile's agreements with "Northern" partners provide enough market access to offset the costs to Chile of trade diversion. Because of preferential market access, however, additive regionalism is likely to provide Chile with many times as many gains as the static welfare gains from unilateral free trade. Harrison, Rutherford, and Tarr find that at least one partner country loses from each of the regional trade agreements they consider, and excluded countries as a group always lose.