NAFTA Expansion: US Imports Upon Chilean, Andean Pact, and MERCOSUR Accession

NAFTA expansion beyond Chile will likely occur by adding the Andean Pact and MERCOSUR. From the new entrants' perspective, the long term success of FTA expansion depends on a variety of dynamic factors, such as the government's credible, public commitment to a liberal trade regime that an...

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Bibliographic Details
Published in:World economy 1997-07, Vol.20 (4), p.477-496
Main Authors: Anderson, Michael A., Smith, Stephen L. S.
Format: Article
Language:English
Subjects:
Economic impact
Economic models
Expansion
Expansionism
Imports
International integration
International trade
MERCOSUR
NAFTA
North America
North American Free Trade Agreement
North American Free Trade Agreement (NAFTA)
Short term
South America
Studies
Trade agreements
U.S.A
United States
US imports
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Summary:NAFTA expansion beyond Chile will likely occur by adding the Andean Pact and MERCOSUR. From the new entrants' perspective, the long term success of FTA expansion depends on a variety of dynamic factors, such as the government's credible, public commitment to a liberal trade regime that an FTA connotes. The political battle in the US in approving any accession, however, is much more likely to focus on short-run adjustment costs. The debate is likely to include concerns for the initial employment and output losses in certain import-sensitive industries. Three widely-cited partial equilibrium models with disaggregated data are used to investigate the near term effects of the potential new trade agreements with Latin America. Four Scenarios are presented - a US-Chile FTA, a US-Andean Pact FTA, a US-MERCOSUR FTA, and an FTA encompassing US trade with all of the Latin American countries represented in the first 3 scenarios.
ISSN:0378-5920
1467-9701
DOI:10.1111/1467-9701.00082