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Preliminary Version- DO NOT QUOTE Fourth Annual Conference of the Euro-Latin Study Network on the Integration and

By David Laborde and Maria Priscila Ramos


The EU and the MERCOSUR have been negotiating a trade preferential agreement for more than four years and now a day, these discussions have stopped for many reasons. First, the progress in a bilateral negotiation is subjected to the evolution and possible gains under the Doha Round. Second, Agriculture is one of the most conflictive stakes in both, bilateral and multilateral negotiations and Tariff-rate quota (TRQs) appears to be policy-makers ’ most favored tool to combine market access commitments and imports ’ control. Finally, the possibility that Venezuela becomes a full member of the MERCOSUR could also change the conditions of these bilateral negotiations. For providing a very detailed analysis of the negotiations, we use the MIRAGE CGE dynamic model from CEPII where TRQs enlargement consequences are taken into account with a particular sensitive analysis on rents allocation. The policy relevance of this paper is twofold: first, Venezuela’s joining in MERCOSUR is explicitly taken into account in the baseline. Second, simulations are run by considering plausible outcomes of the Doha Round, including its failure. Liberalization scenarios (multilateral and regional) are defined at the finest level available (HS6 for trade protection and GTAP sector from GTAP data). Thanks to this, we handle with care the issue of sensitive products and exceptions. Simulation scenarios lead to examine trade flows and welfare effects of EU-MERCOSUR trade agreement (average proposal between EU and MERCOSUR proposal) with and without a successful multilateral trade agreement at the WTO

Topics: Tariff-rate quota, TRQ, Tariff-rate quotas administration, MERCOSUR, European Union, Preferential Trade Agreement, Welfare effects. ∗ CEPII † UMR Economie Publique, INRA/INAPG and CEPII
Year: 2006
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