@article{Latorre:333488,
      recid = {333488},
      author = {Latorre, Maria C. and Yonezawa, Hidemichi and Olekseyuk,  Zoryana},
      title = {The EU-Mercosur agreement: An in-depth analysis of CO2  emissions and labor market results},
      address = {2022},
      pages = {25},
      year = {2022},
      note = {Presented at the 25th Annual Conference on Global Economic  Analysis (Virtual Conference)},
      abstract = {The EU-Mercosur agreement has raised a hot debate,  particularly due to its potential environmental effects. We  estimate its impact using a Computable General Equilibrium  (CGE) model with 41 sectors-4 factors-6 region (EU27,  Brazil, Argentina, Paraguay, Uruguay and ROW), which has  three advanced features: 1) Climate of competition à la  Melitz (2003) in various manufacturing sectors, which  allows us to grasp productivity effects related to trade;  2) Foreign multinationals in advanced service sectors,  operating à la Krugman (1980), which is suitable to grasp  multinationals’ behavior; 3) CO2 emissions across sectors  and regions. Our results point out that this agreement is a  “win-win” for its signatories. Everyone wins, but the  impact will be more visible in the Latin American side. Our  analysis of the total imports of the EU27 shows that this  agreement allows the Mercosur countries to export products  in which they have a comparative advantage, while moving  their export basket towards more complex products. It also  allows the European side to improve its specialization in  more complex sectors. For year 16, i.e., after 15 years of  implementation, the agreement generates a small increase  (0.14%) in CO2 emissions by the EU-Mercosur region which,  however, translates into an improvement in the  emissions/GDP ratio of the EU-Mercosur region (0,17% GDP  increase). The improvement in the emissions/GDP ratio also  holds for the world as a whole.The impacts we derive are  generally larger and more positive than the ones in the  literature. This is firstly because our modeling includes  components of the final agreement reached (Agreement in  Principle of June 28, 2019) that, to our knowledge, have  not yet been included in most previous studies, such as  Foreign Direct Investment (FDI) in services and government  procurement.},
      url = {http://ageconsearch.umn.edu/record/333488},
}