Social impacts: poverty reduction and an increase in living standards. Environmental impacts will be negative. Air, water and land quality are most likely to deteriorate. ECORYS Netherlands BV and partners (2009) EU - ASEAN FTA. Positive economic effects: welfare will increase. Social impacts: some groups and sectors will lose. Environmental impacts: negative, more pressure on natural resources and environment. Negative but rather limited third country effects. Francois, McQueen and Wignaraja (2005) EU - South Africa. EU - Mexico. EU - Chile. EU - Egypt. EU - Mercosur. EU - Turkey. Deep integration is achieved in Mexico, Chile and Turkey resulting in an increase in trade and welfare. Mercosur and are also subject to welfare gains because of the agreement. Egypt economy faces a loss because of domestic distortions hindering trade liberalization. Potential gains are lost from an FTA because of EU restrictions in product coverage and in rules of origin. These restrictions hinder full liberalization and negatively affect trade in agricultural goods and manufactures. RAIA (2005) Australia - China FTA. FTA is focused on the architectural sector. Economic development within this sector in both China and Australia. China’s building and construction growth pattern will be supported because of more liberal access to the Chinese architectural market and Australian architects will add more to Australian export earnings. Significant barriers like ownership restrictions, joint venture provisions, licensing provisions and protections of intellectual property rights remain in place. Jackson (2006) Mexico - Japan FTA. Tariffs were eliminated or reduced. Quota restrictions were loosened. FDI and trade flows increase. Effects are not yet conclusive because of the short period the FTA has been in operative. Effects could be the results of other factors rather than the signing of the FTA. Achterbosch, Kuiper and Roza (2008) EU - India FTA. Tariff reduction. Conflicting interests Full liberalization of agriculture and services would be India could be harmed if the FTA solely focuses on
make the FTA a complex one. optimal for Europe. Trade diversion will harm producers in India. tariff reduction in agriculture and services. The Ministry of Foreign Trade and Tourism of Peru and the Ministry of Commerce of the People’s Republic of China (2007) Peru - China FTA. Tariffs are eliminated Non-tariff does not hinder bilateral trade. Bilateral trade, GDP and welfare will increase. Trade creation and diversion is expected for both Peru and China. Trade creation and diversion can be of negative influence on particular industrial sectors. Negotiations have to focus on this subject to minimize their negative effects. Cadario (2003) FTAA. Elimination of trade barriers like tariffs. Brazil will experience trade expansion while effects of trade diversion will be limited to countries that are not FTAA member. US producers are likely to suffer losses because of increased competition but positive economic effects are expected for Brazil and other Latin American countries that are in the process of development. Conflicts could arise during the process of accomplishing the FTAA. There are 34 countries involved each having its own preferences and interests. Good and solid negotiation is needed to satisfy each country and this could take a while. Choi and Schott (2001) US - Korea. Trade diversion will be of significant negative effect on third countries (decreasing exports of third countries are the result). Choi and Schott investigate the impacts on third parties of an FTA between two countries. Countries that have the strongest similarity of export commodities in comparison to that of the other FTA partner country are likely to suffer most from an FTA. ECORYS NETHERLANDS BV, CUTS and CENTAD (2009) EU - India FTA. Positive economic effects in the field of welfare, trade, production and productivity. Third country effects are witnessed. Social effects: poverty will decline in and health will improve in India while the EU will remain at same level. Wages and employment will increase in India. Environmental effects: Atmosphere, land and water quality are affected slightly negative in Although third country effects are present they are rather limited because of the insignificant export volume of neighbouring countries and preferential treatment.
Kreinin, M.E. (1959), “On the "Trade-Diversion" Effect of Trade-Preference Areas”, The Journal of Political Economy, Vol. 67, No. 4, pp. 398-401, Published by: (1959) Viner, J. (1950), “The Customs Union Issue”, Carnegie Endowment for International Peace, New York Robinson, S. and Thierfelder, K. (1999), “Trade Liberalization and Regional Integration: The Search for Large Numbers”, International Food Policy Research Institute, U.S. Naval Academy Waschik, R. (2005), “Trade Creation, Trade Diversion, and Non-Members of Free Trade Areas”, La Trobe University, Department of Economics and Finance, Victoria, Australia Frankel, J. and Romer, D. (1999), “Does trade cause growth?”, American Economic Review, vol.89, issue 3, pages 379 - 399 Rodríguez, F. and Rodrik, D. (1999), “Trade policy and Economic Growth: A Skeptic’s Guide to the Cross-National Evidence”, University of Maryland and Harvard University, Department of Economics Dollar, D. and Kraay, A. (2003), “Institutions, trade, and growth: Revisiting the evidence”, World Bank Policy Research Paper 3004 Edwards, S. (1998), “Openness, Productivity and Growth: What Do We Really Know?”, Economic Journal, Vol. 108, no. 447: 383-398 Yanikkaya, H. (2002), “Trade openness and economic growth: a cross-country empirical investigation”, Journal of Development Economics 72, 57– 89 Kamrul Hassan, A.F.M. (2005), “Trade Openness and Economic Growth: Search for a Causal Relationship”,
Maag, I. (2005), “Brazil’s Foreign Economic Policy: South – South, North – South or both?”, FES Briefing Paper Randall, L. (1997), “The Political Economy of Latin America in the Postwar Period”, University of Texas Press, Austin, 329 pp Francois, J. Meijl, H. and van Tongeren, F. (2005), “Trade Liberalization in the Doha Development Round”, Economic Policy April: 349-391 Evans, D. Kaplinsky, R. and Robinson, S. (2006), “Deep and shallow integration in Asia: Towards a holistic account”, IDS Bulletin 37.1:12-22, Brighton: IDS Raghavan, C. (1996), “WTO adopts ruling against US on gasoline rules” Barral, W. (2007), “The Brazilian Experience in Dispute Settlement”, ECLAC, Project Documents Collection WTO Appellate Body (2000), “Canada – Measures affecting the export of civilian aircraft”, Report of the Appellate Body Raghavan, C. (1996), “Japan, Brazil consult over Automobile Policy” Doh, J.P. (2003), ”The Bombardier-Embraer Dispute and its Implications for Western Hemisphere Integration”, Policy papers of the Americas, Volume XIV, study 12 Francois, J. and Hall, H.K. (2003), “Global Simulation Analysis of Industry-Level Trade Policy” Cecchini, L. (1988), “Cecchini Report”, Commission of the European Communities Copenhagen Economics (2005), “Economic Assessment of the Barriers to the Internal Market for Services” Internet-sources