Venezuela's road from CAN to Mercosur
(2010) NEKK01 20101Department of Economics
- Abstract
- Latin America has throughout the years been home for different regional integration agreements. The two most recent examples of South American integration blocs are the Andean Community of Nations (CAN) and Mercado Común del Sur (Mercosur). This thesis focuses on the static effects of integration which are caused by the future inclusion of Venezuela, a new member to Mercosur. Moreover, Venezuela’s revealed comparative advantage and specialization in the fuel-sector are scrutinized, adding value to the analysis of trade effects of integration. The character of this study is explorative and forward-looking. It mainly aims at analyzing the likely outcomes of Venezuela’s integration to Mercosur in terms of trade creation and trade diversion.... (More)
- Latin America has throughout the years been home for different regional integration agreements. The two most recent examples of South American integration blocs are the Andean Community of Nations (CAN) and Mercado Común del Sur (Mercosur). This thesis focuses on the static effects of integration which are caused by the future inclusion of Venezuela, a new member to Mercosur. Moreover, Venezuela’s revealed comparative advantage and specialization in the fuel-sector are scrutinized, adding value to the analysis of trade effects of integration. The character of this study is explorative and forward-looking. It mainly aims at analyzing the likely outcomes of Venezuela’s integration to Mercosur in terms of trade creation and trade diversion. To accomplish this, the author makes use of ‘Viner’s ambiguity’ crystallized in five conditions. The results of the study indicate that trade diversion dominates in four out of five analyzed conditions. However, the effects cannot be quantified and therefore a conclusion on whether integration will lead to welfare gains or losses is not possible. Venezuela is South America’s biggest oil-producing country. Hence, a thorough calculation on specialization using Balassa’s revealed comparative advantage on the fuel sector has been carried out. The results indicate that the revealed comparative advantage is lower for Venezuela in relation to CAN. This may imply that Venezuela has a greater potential in specializing in the fuel sector in the future bloc, Mercosur. (Less)
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/1607447
- author
- Estupinan Enriquez, Camila LU
- supervisor
-
- Yves Bourdet LU
- organization
- course
- NEKK01 20101
- year
- 2010
- type
- M2 - Bachelor Degree
- subject
- keywords
- Venezuela, Mercosur, Andean Community of Nations (CAN), economic integration, static effects, trade diversion, trade creation, oil, specialization
- language
- English
- id
- 1607447
- date added to LUP
- 2010-05-24 08:14:59
- date last changed
- 2010-05-24 08:14:59
@misc{1607447, abstract = {{Latin America has throughout the years been home for different regional integration agreements. The two most recent examples of South American integration blocs are the Andean Community of Nations (CAN) and Mercado Común del Sur (Mercosur). This thesis focuses on the static effects of integration which are caused by the future inclusion of Venezuela, a new member to Mercosur. Moreover, Venezuela’s revealed comparative advantage and specialization in the fuel-sector are scrutinized, adding value to the analysis of trade effects of integration. The character of this study is explorative and forward-looking. It mainly aims at analyzing the likely outcomes of Venezuela’s integration to Mercosur in terms of trade creation and trade diversion. To accomplish this, the author makes use of ‘Viner’s ambiguity’ crystallized in five conditions. The results of the study indicate that trade diversion dominates in four out of five analyzed conditions. However, the effects cannot be quantified and therefore a conclusion on whether integration will lead to welfare gains or losses is not possible. Venezuela is South America’s biggest oil-producing country. Hence, a thorough calculation on specialization using Balassa’s revealed comparative advantage on the fuel sector has been carried out. The results indicate that the revealed comparative advantage is lower for Venezuela in relation to CAN. This may imply that Venezuela has a greater potential in specializing in the fuel sector in the future bloc, Mercosur.}}, author = {{Estupinan Enriquez, Camila}}, language = {{eng}}, note = {{Student Paper}}, title = {{Venezuela's road from CAN to Mercosur}}, year = {{2010}}, }