Intra-Regional vs. Extra-Regional Trade Liberalization in Central America
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Cristóbal Campoamor A.
Cardenete Flores M.A.
Caldentey Del Pozo P.
Although the Central American countries trade very extensively with the USA, the remarkable growth of their intra-regional exports is prone to create more internal added value for the region. Taking this background into account, we use and compare a standard, perfectly competitive and an imperfectly competitive GTAP CGE model based on the GTAP 9 database, to assess different scenarios. Our simulations evaluate the elimination of all existing import taxes and export subsidies in 2011, both at the intra-regional level and vis-à-vis the USA. The results emphasize the preference by most of the Central American countries for the completion of the Customs Union at the expense of a deepening of the DR-CAFTA agreements. ©, Copyright © Taylor & Francis Group, LLC.
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