The Impact of Western Hemisphere Free Trade Agreements on the Foreign Sector and Debt Sustainability

This document is part of a series of papers commissioned by the Inter-American Development Bank for the Regional Policy Dialogue. The paper basically discusses the macroeconomic impacts of trade agreements between Latin American countries and the United States, whether they be bilateral or a result of the creation of a Free Trade Agreement of the Americas (FTAA). Taking into account that the greater impact of a trade agreement in the Western Hemisphere is linked to the participation of the United States, it is especially useful to analyze the experience of agreements which include countries that contrast strongly with regards to their relative development. Included in this category are "North-South" agreements or "North-North" agreements that include countries that are very different in regards to their relative development. NAFTA and the expansion of the European Union to include Eastern countries belong to the first category and the impact of the European Union on countries like Spain, Portugal, Greece and Ireland belong in the second. This is the latest version available.