THE G-3 FREE TRADE AGREEMENT: MEMBER COUNTRIES' AGRICULTURAL POLICIES AND ITS AGRICULTURAL PROVISIONS
Arguello, Ricardo; Kyle, Steven C.
Since the mid 1980s Latin American and Caribbean countries have unilaterally liberalized their economies and have started a new wave of economic integration that led to the establishment of 25 trade agreements between 1990 and 1994. The Group of Three (G-3) Free Trade Agreement, comprising Colombia, Mexico, and Venezuela, provided for the liberalization of around 62 percent of exportables from Colombia and Venezuela and 16 percent of those from Mexico_ This paper provides a qualitative assessment of the potential impact of the G-3 on member countries' agricultural trade. Its major conclusion is that the agreement is unlikely to produce important changes either in the structure of member countries' agricultural trade or in bilateral trade flows. This is due to a set of factors among which are the relatively limited number of products included in the agreement and their lack of importance within member countries' trade, the modest size of pre-agreement trade, and the size of the markets involved. The structure of the paper is as follows. First, the most important recent developments in G-3 member countries' agricultural policies are described. Then, the general characteristics of the agreement are presented, giving special emphasis to the agricultural provisions. Finally, a qualitative assessment of the latter is done through their hypothetical application to the current structure of agricultural trade among member countries. Data on G3 agricultural trade are presented in appendix 2.
WP 1996-17 December 1996
Charles H. Dyson School of Applied Economics and Management, Cornell University