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Redalyc.EU-MERCOSUR Trade Agreement: Finding Winners Products for Paraguay Revista de la Facultad de Ciencias Agrarias ISSN: 0370-4661 [email protected] Universidad Nacional de Cuyo Argentina Enciso Cano, Víctor; Castillo Quero, Manuela; De Haro Giménez, Tomás EU-MERCOSUR trade agreement: finding winners products for Paraguay Revista de la Facultad de Ciencias Agrarias, vol. 49, núm. 2, 2017, pp. 289-302 Universidad Nacional de Cuyo Mendoza, Argentina Available in: http://www.redalyc.org/articulo.oa?id=382853527020 How to cite Complete issue Scientific Information System More information about this article Network of Scientific Journals from Latin America, the Caribbean, Spain and Portugal Journal's homepage in redalyc.org Non-profit academic project, developed under the open access initiative EU-MERCOSURRev. FCA UNCUYO. trade 2017. agreement: 49(2): 289-302. Finding ISSN winnersimpreso 0370-4661. products for ISSN Paraguay (en línea) 1853-8665. EU-MERCOSUR trade agreement: finding winners products for Paraguay Acuerdo comercial EU-MERCOSUR: identificando los productos ganadores del Paraguay Víctor Enciso Cano 1, Manuela Castillo Quero 2, Tomás De Haro Giménez 2 Originales: Recepción: 07/09/2016 - Aceptación: 12/12/2016 Abstract The European Union (EU) and the Southern Common Market (MERCOSUR) have been negotiating a Regional Association Agreement (RAA) since the mid-nineties. This paper aims to identify products at the level of sub-headings of the Harmonized System indicators combined with trade statistics from 2010 to 2012. A total of 61 subheadings which would benefit from the signing of the agreement. The methodology used trade were identified with potential to increase its exports to the EU with the agreement. At product.first glance When they this reproduced product was the not traditional considered pattern an important of exports number from ofthe manufactures MERCOSUR countries, a high concentration in agrifood products due to high exported value of one paperwere identifiedfocused on as tariffs; having therefore potential further to increase research their on exports non-tariff to measuresthe EU. This for marketfinding accessshowed is a a potential must. to decrease the dependence on primary or raw material exports. The Keywords EU • MERCOSUR • Paraguay • trade indicators • agrifood 1 Facultad de Ciencias Agrarias. Universidad Nacional de Asunción. Ruta Mcal. [email protected] Estigarribia Km 10,5. San Lorenzo-Paraguay. 2 140014Universidad Córdoba. de Córdoba-Departamento: Economía, Sociología y Política Agrarias. Campus universitario de Rabanales, Edificio Gregor Mendel, 3° Planta, Tomo 49 • N° 2 • 2017 289 V. Enciso Cano, M. Castillo Quero, T. De Haro Giménez Resumen La Unión Europea (UE) y el Mercado Común del Sur (MERCOSUR) se hallan negociando la firma de un Acuerdo de Asociación Regional (AAR) desde mediados de los noventa. Esta investigación buscó identificar productos a nivel de sub-partidas del Sistema Armonizado que serían beneficiados con la firma del acuerdo. Se utilizaron indicadores de comercio exterior y de barreras comerciales, combinados con estadísticas de comercio del período 2010-2012. Se identificaron 61 sub-partidas con potencial para altaincrementar concentración sus exportaciones en productos a EUagroalimentarios con la firma del debido AAR. A apesar un producto de que los con productos elevado reprodujeron el tradicional patrón de las exportaciones de los países del MERCOSUR, valor de exportación que sesgaba los resultados. Cuando se ignoró este producto un materiasimportante primas. número El trabajode manufacturas utilizó aranceles, fue identificado, por lo cual lo quese precisa muestra más la investigaciónexistencia de peropotencial focalizando para disminuir en requisitos la dependencia no arancelarios en la para exportación acceso al demercado. productos primarios o Palabras clave - mentos Unión Europea • MERCOSUR • Paraguay • indicadores de comercio exterior • agroali Introduction The European Union (EU) and the South Common Market (MERCOSUR) have been negotiating a Regional Association withfor Paraguay. conclusions Then and somemethodology, suggestion main for Agreement (RAA) since mid-nineties. furtherfindings studies. and discussion follow, to end In September of 2004, following the Economic integration negotiation was suspended. Years later, The economic analysis on impacts inexchange 2010, negotiationsof market access were proposals, restarted. theSo of commercial agreements started with far an agreement has not been achieved. the theory of custom unions, the seminal Recently, in 2016 new market access work of (21). Up to then the analysis was done using the same methodology The aim of this paper is to identify applied to support free trade, being productsproposals at were a 6 exchanged.digit level (sub-headings) Ricardo´s comparative advantages and of the Harmonized System currently being factor endowment of Heckscher-Ohlin, by the implementation of the agreement. effects of economic integration on the Followingexported by this Paraguay background that would there benefit are the most common. Viner identified two sections on commercial integration, one positive called trade creation and a impact evaluation methods, and a brief negativeproduction one and known the ascommercial trade diversion. flows, summary of the very few impact studies of the agreement that include results effects. Trade creation refers to a situation They are classified as static or short runs 290 Revista de la Facultad de Ciencias Agrarias EU-MERCOSUR trade agreement: Finding winners products for Paraguay in which two countries begin to trade level, the most aggregated of all, includes with each other due to the elimination quantitative models such as computable or reduction of border restrictions. The general equilibrium models (CGE). new situation with reduced prices stimu- The second level includes the use of lates consumption of goods and therefore trade and commercial barriers indicators. Sectorial studies are considered country. Trade creation encourages the the most disaggregated level (20). properincreases allocation production of economicin the more resources, efficient boosts general welfare by means of methodology by means of two criteria. specialization and enhances trade Piermartini, R. (2005), classifies the between the partners. Trade diversion occurs when one country within a custom The first takes into account the time union begins to import a good from the inof tradethe evaluation policy and and its canfuture be impactsex-ante onor new partner, when previously it used aex-post. set of economicsEx-ante simulates variables. the It answerschange to import the same good from a third country. This country is no included in evaluation, on the other hand, is applied the union, therefore its product faces aftera "what the if" commercial type of question. agreement An ex-postimple- border restriction and hence is more mentation. Therefore uses historical data. Most econometric models are of this type. the custom union. Once the custom union The second criterion considers isexpensive implemented relative trade to the divers new partnerfrom the in whether the approach would be sectorial former source outside de union to a new or would cover the entire economy. source within the union. Later, Meade and The former uses partial equilibrium Lipsey (13, 16) substituted the Vinner´s analysis and the latter a general equilibrium assumption that goods were consumed in analysis. UNCTAD (2012) proposes the stated that relative prices changed due statistics and trade and commercial thefixed increase proportions in imports by relative and consumption, prices. They barriersfollowing indicators; classification: (ii) simulation i) Descriptive models and price reduction following integration including partial and general equilibrium; favored consumption. This was called and (iii) econometrics models such as gravitational models. commercial agreement. Impact assessments of trade agree- trade expansion. It was a third effect of ments are commonly conducted using be positive or negative depending on the computable general equilibrium (CGE). magnitudeThe final of effect the positive of the integration effects, creation could General equilibrium models consider the interrelationships between the various effects, trade diversion (17, 18). sectors that make up the economy. They and expansion of trade, and of the negative are most appropriate to analyze the effects Methodologies for assessing trade of trade liberalization since they assume agreements that markets are not isolated but intercon- nected (15, 18). Their results are estimates methodologies used to evaluate the impact of aggregate effects, which can provide an of Theyfree tradeare manyagreements. ways toCEI classified(2003a) overall idea of ​​the effect of integration. groups them in three stages based on A description of the major studies of the the aggregation levels of products. First effects of an FTA between the EU and Tomo 49 • N° 2 • 2017 291 V. Enciso Cano, M. Castillo Quero, T. De Haro Giménez MERCOSUR can be found in Boyer (2010) be one of the reasons. However, they and Burrell (2011). Modeling studies using partial equilibrium are scarce. This of products at a high level of disaggre- gation.are quite Trade useful indicators in the (specialization, identification product or sector ignoring the interaction complementarity, revealed advantages, withmay beother because markets they focusthat areon aassumed specific etc.) are very useful descriptive tools for constant (ceteris paribus). Not considering analysis of trade
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