The European Union ( Eu ) And North American Free Trade Agreement

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The European Union (EU) and North American Free Trade Agreement (NAFTA) both consists of twenty-seven countries that makes it the largest trading bloc in the world. Based on the 2008 figure, the value of the exports of goods/services from European Union to NAFTA was 639. One billion Canadian dollars while the import of goods/services to the European Union from the NAFTA was amounted to 513.9 billion Canadian dollars. Two trade blocs are also highly interdependent by the means of FDI. In 2007, the value of inflows of FDI NAFTA from EU was about 1.77 trillion Canadian dollars and 1.63 trillion Canadian dollars from NAFTA to EU respectively. After the United States, the European Union is Canada’s second most significant trading partner. In…show more content…
In 2012, US exported $265.1 billion worth of merchandise to EU and imported $380.8 billion respectively. When one add services this figure, it increases by $193.8 billion (30.6% of total United States service exports) and $149.7 billion (35.4% of total United States service imports). Mexico heavily relies on the European Union market as well; after the United States the EU is the second most important trading partner to Mexico. EU and Mexico do have an established free trade agreement that came into effect as of 2000. Although Mexico still imposes tariffs and quotas on certain products such as meat and dairy, the EU and Mexico partnership is still one of the most comprehensive in the world’s economy. In 2014, the EU exported €27.4 billion worth of goods to Mexico and €18 billion in imports. FDI from Mexico to EU amounted for €22.6 billion(inflow) in 2013 while the FDI outflow was around €102.3 billion. The primary objective of this paper is to investigate the effects of two policies that are related to Trans-Atlantic Free Trade Agreement (FTA). Firstly, we will explore the effects of bilateral FTA between Canada and the EU on different Canadian sectors (policy 1). Secondly, to investigate the economic effect if there is a free trade agreement between EU and NAFTA (Policy 2). There are various techniques that could be utilized to carry out this analysis. In this paper we use Computable General Equilibrium (CGE) model and used Global
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