GDP Center Launches New Paper on EU-MERCOSUR FTA
On June 8, 2021, the Global Development Policy (GDP) Center, an affiliated regional center at the Frederick S. Pardee School of Global Studies at Boston University, published a working paper exploring the EU-MERCOSUR free trade agreement (FTA) and its potential adverse effects.
In the paper, titled “Trading Away Industrialization? Context and Prospects of the EU-Mercosur Agreement,” authors Jeronim Capaldo and Özlem Ömer – GDP Center research fellows – analyze the contexts and prospects of the FTA in Argentina, Brazil, Germany, Italy, France, Turkey, Czech Republic and Poland. The two conclude that the agreement is likely to be a step toward less productive, more unequal and more vulnerable economies in both blocs.
A few key findings of the paper are as follows:
- All countries in the study have recently experienced economic polarization and are more vulnerable to the risks of trade liberalization.
- Existing projections from other studies point to small GDP gains for these countries from the agreement, while polarization and other adverse outcomes are assumed away. Based on these projections, the agreement is likely to push most of the countries surveyed—especially in MERCOSUR, further away from sustainable growth and development.
- Without appropriate industrial and income policies, the FTA will likely lead to higher inequality in all participating countries hindering long-term economic recovery and sustainable development.
The full working paper can be read on the GDP Center’s website. The paper was also the subject of a Global Trade Review article, which can be read online.
On June 10, 2021, the GDP Center hosted a launch of this paper featuring Kevin Gallagher, GDP Center Director and Pardee School Professor of Global Development Policy; Jeronim Capaldo, GDP Center Non-Resident Senior Research Scholar and Economic Affairs Officer, Division on Globalization and Development Strategies, United Nations Conference on Trade and Development; Özlem Ömer, GDP Center Non-Resident Research Fellow; Nelson Barbosa, Former Minister of Finance and Planning of Brazil, Professor at FGV and the University of Brasilia (Brazil); Nadia Garbellini: Post-doctoral Fellow, University of Pavia (Italy); and Ramiro L. Bertoni: Former President, Argentine National Commission of Foreign Trade; Professor, National University of Quilmes and San Martín (Argentina). A recording of the webinar can be viewed below.
The GDP Center is a university-wide research center affiliated with the Pardee School of Global Studies. The GDP Center’s mission is to advance policy-oriented research for financial stability, human well-being, and environmental sustainability. Visit the GDP Center’s website for more.