The colombia-canada free trade area: a partial equilibrium simulation
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Universidad de Medellín
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This paper uses disaggregated trade data for 2010 and applies ex-ante partial equilibriummodeling to calculate the impact of the preferential trade agreement between Canadaand Colombia. The simulations carried out show aggregate trade creation could be oneand a half times larger than trade diversion; trade between the two countries in the firstyear of the agreement could grow by approximately ten percent and will be focussed ona small number of goods; trade diversion is stronger with the largest trading partner ofeach signatory, namely the United States; and trade diversion is not strong in the caseof Colombia’s neighbors with which there was significant trade prior to the agreement
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Preferential trade agreement, trade creation, welfare effects, partial equilibrium simulation
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