The Free Trade Agreement between Chile and the EU: Its Potential Impact on Chile's Export Industry

22 Pages Posted: 24 Aug 2008

See all articles by Felicitas Nowak-Lehmann

Felicitas Nowak-Lehmann

University of Goettingen (Göttingen) - Department of Economics

Dierk Herzer

Helmut-Schmidt-University Hamburg

Sebastian Vollmer

University of Goettingen (Göttingen)

Date Written: August 23, 2008

Abstract

Bilateral Free Trade Agreements have been used extensively by Chile to expand its exports and improve its competitive position in the world markets. It is the objective of this paper to analyze the role of trade agreements, price competitiveness, real income, per capita income differences and transport costs in Chilean export trade with the EU. To this end, Chile's most important export sectors are investigated using panel data from Chile's main trading partners in the EU over the period 1988-2002. The econometric model used in the simulations is a refined augmented gravity model. It is found that the FTA would strongly boost Chile's food related exports which face high protection in the EU market.

Keywords: Chile-EU agreement, Sectoral trade flows, Gravity model, Panel analysis

JEL Classification: C23, F14, F17

Suggested Citation

Nowak-Lehmann, Felicitas and Herzer, Dierk and Vollmer, Sebastian, The Free Trade Agreement between Chile and the EU: Its Potential Impact on Chile's Export Industry (August 23, 2008). Applied Econometrics and International Development, Vol. 7, No. 1, 2007, Available at SSRN: https://ssrn.com/abstract=1249285

Felicitas Nowak-Lehmann (Contact Author)

University of Goettingen (Göttingen) - Department of Economics ( email )

Platz der Goettinger Sieben 3
Goettingen, 37073
Germany

Dierk Herzer

Helmut-Schmidt-University Hamburg ( email )

Germany

Sebastian Vollmer

University of Goettingen (Göttingen) ( email )

Platz der Göttinger Sieben 3
Göttingen, 37073
Germany

HOME PAGE: http://sebastianvollmer.wordpress.com/

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