Potential Impacts of Mercosur-Egypt Free Trade Agreement

Abstract

Mercosur-Egypt Free Trade Agreement was ratified in May 2017. This article examines potential gains for the agreement parties, through analysis of preferential margins, trade complementarity, and revealed comparative advantage indexes. Trade complementarity indexes show potential for higher trade between Egypt and Mercosur countries. Small preferential margins are expected to be gained for currently traded products which are subject to immediate tariff liberalization. Revealed comparative advantage analysis highlights several sectors which have the potential to benefit from the agreement.