make the FTA a complex optimal for Europe. tariff reduction in one. Trade diversion will agriculture and harm producers in services. India. The Ministry of Foreign Peru - China FTA. Bilateral trade, GDP Trade creation and Trade and Tourism of Peru Tariffs are eliminated and welfare will diversion can be of and the Ministry of Non-tariff does not hinder increase. negative influence on Commerce of the bilateral trade. Trade creation and particular industrial People’s Republic of China (2007) diversion is expected sectors. for both Peru and Negotiations have to China. focus on this subject to minimize their negative effects. Cadario (2003) FTAA. Brazil will experience Conflicts could arise Elimination of trade trade expansion while during the process of barriers like tariffs. effects of trade accomplishing the diversion will be FTAA. There are 34 limited to countries countries involved that are not FTAA each having its own member. preferences and US producers are interests. Good and likely to suffer losses solid negotiation is because of increased needed to satisfy competition but each country and this positive economic could take a while. effects are expected for Brazil and other Latin American countries that are in the process of development. Choi and Schott (2001) US - Korea. Trade diversion will Choi and Schott be of significant investigate the negative effect on impacts on third third countries parties of an FTA (decreasing exports between two of third countries are countries. the result). Countries that have the strongest similarity of export commodities in comparison to that of the other FTA partner country are likely to suffer most from an FTA. ECORYS EU - India FTA. Positive economic Although third NETHERLANDS BV, effects in the field of country effects are CUTS and CENTAD welfare, trade, present they are (2009) production and rather limited productivity. Third because of the country effects are insignificant export witnessed. volume of Social effects: neighbouring poverty will decline in countries and and health will preferential improve in India while treatment. the EU will remain at same level. Wages and employment will increase in India. Environmental effects: Atmosphere, land and water quality are affected slightly negative in
make the FTA a complex one. optimal for Europe. Trade diversion will harm producers in India. tariff reduction in agriculture and services. The Ministry of Foreign Trade and Tourism of Peru and the Ministry of Commerce of the People’s Republic of China (2007) Peru - China FTA. Tariffs are eliminated Non-tariff does not hinder bilateral trade. Bilateral trade, GDP and welfare will increase. Trade creation and diversion is expected for both Peru and China. Trade creation and diversion can be of negative influence on particular industrial sectors. Negotiations have to focus on this subject to minimize their negative effects. Cadario (2003) FTAA. Elimination of trade barriers like tariffs. Brazil will experience trade expansion while effects of trade diversion will be limited to countries that are not FTAA member. US producers are likely to suffer losses because of increased competition but positive economic effects are expected for Brazil and other Latin American countries that are in the process of development. Conflicts could arise during the process of accomplishing the FTAA. There are 34 countries involved each having its own preferences and interests. Good and solid negotiation is needed to satisfy each country and this could take a while. Choi and Schott (2001) US - Korea. Trade diversion will be of significant negative effect on third countries (decreasing exports of third countries are the result). Choi and Schott investigate the impacts on third parties of an FTA between two countries. Countries that have the strongest similarity of export commodities in comparison to that of the other FTA partner country are likely to suffer most from an FTA. ECORYS NETHERLANDS BV, CUTS and CENTAD (2009) EU - India FTA. Positive economic effects in the field of welfare, trade, production and productivity. Third country effects are witnessed. Social effects: poverty will decline in and health will improve in India while the EU will remain at same level. Wages and employment will increase in India. Environmental effects: Atmosphere, land and water quality are affected slightly negative in Although third country effects are present they are rather limited because of the insignificant export volume of neighbouring countries and preferential treatment.