Trade Policy Options for Chile : Importance of Market Access
This article uses a multi sector, multi county, computable general equilibrium model to examine Chile's strategy of 'additive regionalism' negotiating bilateral free trade agreements with all of its significant trading partners. Taking Chile regional arrangements bilaterally, only its agreements with Northern partners provide sufficient market access to overcome trade diversion costs. Due to preferential market access, however, additive regionalism is likely to provide Chile with gains that are many multiples of the static welfare gains from unilateral free trade. At least one partner country loses from each of the regional agreements considered, and excluded countries as a group always lose. Gains to the world from global free trade are estimated to be vastly larger than gains from any of the regional arrangements.
| Main Authors: | , , |
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| Format: | Journal Article biblioteca |
| Language: | English en_US |
| Published: |
Washington, DC: World Bank
2002-01
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| Subjects: | ADDITIVE REGIONALISM, BILATERAL FREE TRADE, MARKET ACCESS, REGIONAL TRADE AGREEMENTS, TRADE DIVERSION, TRADE POLICY, WELFARE GAINS, |
| Online Access: | http://documents.worldbank.org/curated/en/2002/01/17737280/trade-policy-options-chile-importance-market-access https://hdl.handle.net/10986/17188 |
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| Summary: | This article uses a multi sector, multi
county, computable general equilibrium model to examine
Chile's strategy of 'additive regionalism'
negotiating bilateral free trade agreements with all of its
significant trading partners. Taking Chile regional
arrangements bilaterally, only its agreements with Northern
partners provide sufficient market access to overcome trade
diversion costs. Due to preferential market access, however,
additive regionalism is likely to provide Chile with gains
that are many multiples of the static welfare gains from
unilateral free trade. At least one partner country loses
from each of the regional agreements considered, and
excluded countries as a group always lose. Gains to the
world from global free trade are estimated to be vastly
larger than gains from any of the regional arrangements. |
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