Nothing Special   »   [go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/ecr/col022/3920.html
   My bibliography  Save this paper

Poverty impacts of trade integration with the European Union: lessons for Ecuador

Author

Listed:
  • Wong, Sara
  • Kulmer, Veronika
Abstract
This research proposes to quantify the effects of a trade agreement with the European Union on poverty in Ecuador. Both poverty and the signing of a trade agreement with the EU are issues under discussion in Ecuador. Ecuador seeks to sign a trade agreement with the EU given their complementarities in trade: the EU is a major market for Ecuadorian agricultural and fish products, and Ecuador imports mainly manufacturing goods from the EU. In particular, the EU is the main market for the main agricultural export product of Ecuador: bananas. The transmission mechanisms to study these issues include changes in commodity prices, wages and earnings, and labor market demands. This research combines a reduced-form micro household income and occupational choice model with a standard single-country computable general equilibrium model (CGE); for Ecuador. This study highlights that a trade agreement with the EU may have a different impact on poverty depending on the degree of initial tariff reduction, on labor market considerations, and on whether better access to Ecuadorian bananas is granted by the negotiations or not. Through trade liberalization there is a significant increase in imports from the EU, particularly in protected sectors. With better access for bananas to the EU market, investment constraints may mean that increasing export and production of bananas can be achieved by pulling resources (namely production and labor); out from other sectors. Nearly every scenario of trade agreement leads to a decline in extreme poverty in rural regions. In contrast, extreme poverty in urban regions may increase.

Suggested Citation

  • Wong, Sara & Kulmer, Veronika, 2011. "Poverty impacts of trade integration with the European Union: lessons for Ecuador," Documentos de Proyectos 3920, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    • Handle: RePEc:ecr:col022:3920
    Note: Includes bibliography
    as

    Download full text from publisher

    File URL: http://repositorio.cepal.org/handle/11362/3920
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Duncan Thomas & James P. Smith & Kathleen Beegle & Graciela Teruel & Elizabeth Frankenberg, 2002. "Wages, employment and economic shocks: Evidence from Indonesia," Journal of Population Economics, Springer;European Society for Population Economics, vol. 15(1), pages 161-193.
    2. Gordon H. Hanson, 2007. "Globalization, Labor Income, and Poverty in Mexico," NBER Chapters, in: Globalization and Poverty, pages 417-456, National Bureau of Economic Research, Inc.
    3. Porto, Guido G., 2006. "Using survey data to assess the distributional effects of trade policy," Journal of International Economics, Elsevier, vol. 70(1), pages 140-160, September.
    4. Petia Topalova, 2007. "Trade Liberalization, Poverty and Inequality: Evidence from Indian Districts," NBER Chapters, in: Globalization and Poverty, pages 291-336, National Bureau of Economic Research, Inc.
    5. Feenstra, Robert C., 1989. "Symmetric pass-through of tariffs and exchange rates under imperfect competition: An empirical test," Journal of International Economics, Elsevier, vol. 27(1-2), pages 25-45, August.
    6. Jeffrey Frankel & David Parsley & Shang-Jin Wei, 2012. "Slow Pass-through Around the World: A New Import for Developing Countries?," Open Economies Review, Springer, vol. 23(2), pages 213-251, April.
    7. L. ALAN WINTERS & NEIL McCULLOCH & ANDREW McKAY, 2015. "Trade Liberalization and Poverty: The Evidence So Far," World Scientific Book Chapters, in: Non-Tariff Barriers, Regionalism and Poverty Essays in Applied International Trade Analysis, chapter 14, pages 271-314, World Scientific Publishing Co. Pte. Ltd..
    8. Elhanan Helpman & Paul Krugman, 1987. "Market Structure and Foreign Trade: Increasing Returns, Imperfect Competition, and the International Economy," MIT Press Books, The MIT Press, edition 1, volume 1, number 026258087x, April.
    9. Jorge F. Balat & Guido G. Porto, 2007. "Globalization and Complementary Policies: Poverty Impacts on Rural Zambia," NBER Chapters, in: Globalization and Poverty, pages 373-416, National Bureau of Economic Research, Inc.
    10. Sushanta Mallick & Helena Marques, 2008. "Passthrough of Exchange Rate and Tariffs into Import Prices of India: Currency Depreciation versus Import Liberalization," Review of International Economics, Wiley Blackwell, vol. 16(4), pages 765-782, September.
    11. Goldberg, Pinelopi Koujianou & Pavcnik, Nina, 2005. "Trade, wages, and the political economy of trade protection: evidence from the Colombian trade reforms," Journal of International Economics, Elsevier, vol. 66(1), pages 75-105, May.
    12. Chor-ching Goh & Beata S. Javorcik, 2007. "Trade Protection and Industry Wage Structure in Poland," NBER Chapters, in: Globalization and Poverty, pages 337-372, National Bureau of Economic Research, Inc.
    13. Nicita, Alessandro, 2009. "The price effect of tariff liberalization: Measuring the impact on household welfare," Journal of Development Economics, Elsevier, vol. 89(1), pages 19-27, May.
    14. François Bourguignon & Maurizio Bussolo & John Cockburn, 2010. "Guest Editorial - Macro-micro analytics: background, motivation, advantages and remaining challenges," International Journal of Microsimulation, International Microsimulation Association, vol. 3(1), pages 1-7.
    15. Ronald Fischer & Pablo Serra, 1996. "The gains from trade in an specific factor growth model," Estudios de Economia, University of Chile, Department of Economics, vol. 23(2 Year 19), pages 179-199, December.
    16. James Levinsohn & Margaret McMillan, 2007. "Does Food Aid Harm the Poor? Household Evidence from Ethiopia," NBER Chapters, in: Globalization and Poverty, pages 561-598, National Bureau of Economic Research, Inc.
    17. Glenn W. Harrison & Thomas F. Rutherford & David G. Tarr, 2005. "Chile´s Regional Arrangements: The Importance of Market Access and Lowering the Tariff to Six Percent," Central Banking, Analysis, and Economic Policies Book Series, in: Rómulo A. Chumacero & Klaus Schmidt-Hebbel & Norman Loayza (Series Editor) & Klaus Schmidt-Hebbel (S (ed.),General Equilibrium Models for the Chilean Economy, edition 1, volume 9, chapter 9, pages 303-344, Central Bank of Chile.
    18. Alexander Schejtman & Albert Berry & Xavier Sala-i-Martin & Julio A. Berdegué & Victoria Florez & Pranab Bardhan & Paolo Giordano, 2009. "Trade and Poverty in Latin America," IDB Publications (Books), Inter-American Development Bank, number 15418 edited by Paolo Giordano, February.
    19. Terra, María Inés & Patrón, Rossana, 2010. "Formación de capacidades en el Uruguay: ¿cuáles son las cualificaciones del trabajo requeridas para el desarrollo?," Documentos de Proyectos 3826, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    20. Jayant Menon, 1993. "Exchange Rate Pass-Through for Australian Manufactured Imports: Estimates from the Johansen Maximum-Likelihood Procedure," Centre of Policy Studies/IMPACT Centre Working Papers ip-60, Victoria University, Centre of Policy Studies/IMPACT Centre.
    21. repec:idb:brikps:15418 is not listed on IDEAS
    22. Daniel M. Bernhofen & John C. Brown, 2004. "A Direct Test of the Theory of Comparative Advantage: The Case of Japan," Journal of Political Economy, University of Chicago Press, vol. 112(1), pages 48-67, February.
    23. De Miguel, Carlos J. & Durán Lima, José Elías & Schuschny, Andrés Ricardo, 2008. "Política comercial de Chile y los TLC con Asia: evaluación de los efectos de los TLC con Japón y China," Estudios Estadísticos 4769, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    24. Schejtman, Alexander & Berry, Albert & Sala-i-Martin, Xavier & Berdegué, Julio A. & Florez, Victoria & Bardhan, Pranab & Giordano, Paolo, 2009. "Trade and Poverty in Latin America," IDB Publications (Books), Inter-American Development Bank, number 236, November.
    25. Valdés, Alberto & Foster, William, 2010. "Incentivos agrícolas, crecimiento y pobreza en América Latina y el Caribe: evidencia de corte transversal para el período 1960-2005. ¿La liberalización comercial incrementó los ingresos de los más pob," Documentos de Proyectos 3822, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Paolo Giordano & Kun Li, 2012. "An Updated Assessment of the Trade and Poverty Nexus in Latin America," IDB Publications (Working Papers) 79119, Inter-American Development Bank.
    2. Giordano, Paolo & Li, Kun, 2012. "An Updated Assessment of the Trade and Poverty Nexus in Latin America," IDB Publications (Working Papers) 4209, Inter-American Development Bank.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lopez, Ramon E., 2010. "Poverty and Income Distribution in Latin America: On the Complementarities Between Trade Policy and Social Public Spending," Working Papers 94204, University of Maryland, Department of Agricultural and Resource Economics.
    2. Terra, María Inés & Patrón, Rossana, 2010. "Skill formation in Uruguay: what are the required labour qualifications for development?," Documentos de Proyectos 3768, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    3. de Souza Ferreira Filho, Joaquim Bento, 2010. "El incremento mundial en la demanda de etanol y la pobreza en Brasil," Documentos de Proyectos 3820, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    4. González, Cynthia & Arce, Lucas & Masi, Fernando & Servín, Belén & Setrini, Gustavo, 2010. "Comercio y pobreza en Paraguay: el caso de una cadena de valor agroindustrial," Documentos de Proyectos 3817, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    5. González, Cynthia & Arce, Lucas & Masi, Fernando & Servín, Belén & Setrini, Gustavo, 2011. "Trade and poverty in Paraguay: the case of an agribusiness value chain," Documentos de Proyectos 3928, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    6. Rivera, Luis & Rojas-Romagosa, Hugo, 2009. "Human Capital Formation and the Linkage between Trade and Poverty: The Cases of Costa Rica and Nicaragua," Conference papers 331887, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    7. Rivera, Luis & Rojas-Romagosa, Hugo, 2010. "Formación de capital humano y el vínculo entre comercio y pobreza: los casos de Costa Rica y Nicaragua," Documentos de Proyectos 3814, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    8. Terra, María Inés & Patrón, Rossana, 2010. "Formación de capacidades en Uruguay: ¿cuáles son las cualificaciones del trabajo requeridas para el desarrollo económico?," Documentos de Proyectos 3815, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    9. Tellería, Roberto & Fernández, Soraya & Ludeña, Carlos, 2011. "Policy alternatives and strategies for the Plurinational State of Bolivia following the end of trade preferences," Documentos de Proyectos 3911, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    10. Tellería, Roberto & Fernández, Soraya & Ludeña, Carlos, 2010. "Políticas alternativas y estrategias para Bolivia tras el fin de las preferencias arancelarias ATPDEA: evaluación de un acuerdo comercial con la Unión Europea," Documentos de Proyectos 3811, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    11. Valdés, Alberto & Foster, William, 2010. "Incentivos agrícolas, crecimiento y pobreza en América Latina y el Caribe," Documentos de Proyectos 3813, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    12. -, 2011. "Trade, poverty and complementary policies in Latin America," Documentos de Proyectos 3918, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    13. Wong, Sara & Kulmer, Veronika, 2010. "Integración comercial con la UE e impactos sobre la pobreza en Ecuador," Documentos de Proyectos 3809, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    14. -, 2010. "Comercio, pobreza y políticas complementarias en América Latina," Documentos de Proyectos 3807, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    15. Valdés, Alberto & Foster, William, 2011. "Agricultural incentives, growth and poverty in Latin America and the Caribbean," Documentos de Proyectos 3924, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    16. Durán Lima, José Elías & LaFleur, Marcelo & Pellandra, Andrea, 2011. "Trade, poverty and complementary policies," Documentos de Proyectos 3919, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    17. Durán Lima, José Elías & Finot, Alfonso & LaFleur, Marcelo, 2010. "Análisis de la apertura comercial sobre el bienestar de los hogares: una aplicación para Chile 1999-2006," Documentos de Proyectos 3818, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    18. Durán Lima, José Elías & Finot, Alfonso & LaFleur, Marcelo, 2011. "Analysis of the effects of trade opening on household welfare: an application to Chile, 1999-2006," Documentos de Proyectos 3929, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    19. López, Ramón, 2010. "Pobreza y distribución del ingreso en América Latina: complementariedades entre política comercial y gasto público social," Documentos de Proyectos 3828, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    20. de Souza Ferreira Filho, Joaquim Bento, 2011. "The rise in global demand for ethanol and poverty in Brazil," Documentos de Proyectos 3923, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ecr:col022:3920. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Biblioteca CEPAL (email available below). General contact details of provider: https://edirc.repec.org/data/eclaccl.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.