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Bolivia-European Union Trade Agreement: Is It an Option for the Morales Administration?

Published online by Cambridge University Press:  05 September 2022

Roberto Telleria  and
Carlos Ludena
Roberto Telleria
Affiliation:
International Center for Agricultural Research in the Dry Areas (ICARDA)
Carlos Ludena
Affiliation:
Inter-American Development Bank
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Abstract

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In 2008 Bolivia ceased to benefit from US trade preferences, which resulted in thousands of jobs lost thoroughout the country. Without the political will to initiate a trade agreement with the United States, the Morales administration has the opportunity to initiate a trade agreement with the European Union. This study evaluates macro- and microeconomic impacts emerging from a hypothetical trade agreement between Bolivia and the European Union. Our methodology consisted of using a computable general equilibrium model as price generator, and a micro-simulation approach as a bridge to transmit those price changes to the household level under two liberalization scenarios. We conclude that Bolivia could benefit if a trade agreement with the European Union (the second largest importer of goods in the world) is accomplished.

Resumen

Resumen

En 2008 Bolivia dejó de beneficiarse de las preferencias comerciales que recibía de los Estados Unidos, lo cual resultó en la pérdida de miles de trabajos en todo el país. Sin la voluntad política de iniciar un acuerdo comercial con Estados Unidos, la administración Morales tiene la oportunidad de iniciar un acuerdo comercial con la Unión Europea. Este estudio evalúa los impactos macro y micro emergentes de un hipotético acuerdo entre Bolivia y la Unión Europea. Nuestra metodología consiste en usar un modelo de equilibrio general como generador de precios, y un modelo de micro-simulación utilizado como puente para transmitir los cambios en precios a nivel de hogar bajo dos escenarios diferentes de liberalización. La conclusión fundamental de esta investigación es que un acuerdo comercial entre Bolivia y la Unión Europea es preferible a mantener el statu quo. Algunos de los países andinos (Colombia y Perú) ya lograron un acuerdo comercial con la Unión Europea mientras que los países del Mercosur están trabajando para alcanzar este acuerdo. La administración Morales decidió, por el momento, dejar de lado cualquier posibilidad de acuerdo con los Estados Unidos (el mayor importador de bienes del mundo), aunque el país puede aún beneficiarse si logra un acuerdo con la Unión Europea (el segundo mayor importador de bienes del mundo).

Type
Research Article
Information
Latin American Research Review , Volume 50 , Issue 3 , 2015 , pp. 24 - 45
Copyright
Copyright © 2015 by the Latin American Studies Association

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