European Union-Developing Country Ftas: Overview and Analysis

Abstract

This paper explores the complex structures of recent free trade agreements (FTAs) between the EU and developing countries, surveys the main factors determining their economic effects, and presents quantitative simulations of the effects of these agreements. Limitations of product coverage substantially reduce the potential benefits of the agreements compared to full bilateral free trade, while only the Mexico, Chile and Turkey agreements have trade related commitments which are wider and deeper than the preferential reduction in tariffs. In the case of Egypt, existing levels of protection mean that it is moving to regional free trade with many domestic distortions still in place, producing a significant loss for the Egyptian economy.

Keywords: Free Trade Agreements, CGE Modelling, European Union, Developing Countries