Trade and Investment Liberalization in the Processed Food Market under the Comprehensive Economic and Trade Agreement
Trade and Investment Liberalization in the Processed Food Market under the Comprehensive Economic and Trade Agreement
Blog Article
We investigate the impacts of Comprehensive Economic and Trade Agreement (CETA) liberalizations of trade and investment barriers on processed food markets.Using a four-region monopolistic competition model with heterogeneous food-processing firms that incorporates domestically operating, exporting, and jumbo gourmet tava multinational enterprise (MNE) firms, we quantify the effects of tariff elimination, fixed trade cost 33 14.50 r24 reduction, and foreign direct investment (FDI) cost reduction under CETA on prices, domestic sales, bilateral trade flows, affiliate sales, productivity, number of firms, and aggregate output.Our results highlight that trade liberalization promotes bilateral exports but reduces foreign affiliate sales, and, in contrast, lower FDI costs expand MNE affiliate sales but curtail bilateral exports.
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