Effects of Ecuador’s Regional Trade Agreements: A Partial Equilibrium Analysis

This study presents an empirical evaluation of Ecuador’s regional trade agreements (RTAs) with Mexico, China, and the Pacific Alliance on trade, production, and welfare. The analysis utilises the global simulation model (GSIM) and incorporating estimated elasticities. The findings reveal that the bilateral RTAs with Mexico and China yield substantial trade creation effects, while the RTA with the Pacific Alliance displays heterogeneous impacts on trade among member countries. Notably, the RTA with China is anticipated to drive significant expansion in Ecuador’s production capabilities, in stark contrast to the more modest growth projected under the RTAs with Mexico and the Pacific Alliance.