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GTAP Resources: Resource Display

GTAP Resource #2818

"Poverty Effects of Trade Liberalization in Bolivia: An Assessment of a FTA with the U.S."
by Telleria, Roberto, Carlos Ludena, Bennett Richard M. and Shankar Bhavani

The world has witnessed an unparalleled increase in trade liberalization over the last few decades. These have been accompanied by increasing concerns over economic growth and distributional impacts emerging from trade agreements. An applied literature has emerged to address ex-ante effects at both macroeconomic and household levels. This article contributes to this literature by analyzing the case of Bolivia, which is about to initiate negotiations of a trade liberalization agreement with the US. We combine a computable general equilibrium model and a micro simulation approach to provide insights into whether the Bolivian economy and its households would win or lose from trade liberalization. The article indicates that Bolivia’s efforts to reach a trade agreement with the US would pay off. However, an absolute trade liberalization scheme would not be the best option for the Bolivian poor. Sector specific measures in the form of protection to sensitive commodities would ensure that expected benefits would be more evenly distributed across most Bolivian households. Negative impacts from the elimination of US trade preferences to Bolivia and failure to sign a trade agreement with the US, suggest that a strong protectionist trade policy and limited trade relations have to be avoided if economic growth and household wellbeing are to be improved.

Key words: Trade policy, macro-micro simulation, livelihoods, Bolivia

Resource Details (Export Citation) GTAP Keywords
Category: GTAP Application
Status: Published
By/In: Accepted for publication in the Journal of International Agricultural Trade and Development
Date: 2009
Created: Ludena, C. (5/13/2008)
Updated: Ludena, C. (3/18/2009)
Visits: 2,467
- Preferential trading arrangements
- Economic development
- Economic analysis of poverty
- South America

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Special Instructions
Complete paper version published in the Journal of International Agricultural Trade and Development, Volume 5 Issue 1 (2009).

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