Journal of Economics and Development Studies

Free Trade Agreements and their Impact on the Economic Growth of Developing Countries
Mauricio Nieto, Mauricio Soler, Fabio Fernando Moscoso Duran, Nelson Andrade

Abstract
The approval of the Free Trade Agreement between the U.S. and Colombia means the final entry of the Colombian economy to the economic model of globalized markets. The application of this economic paradigm aims to extend the frontier of consumption of individuals involved in the process of trade, which results in an increase in Gross Domestic Product (GDP), a reduction in the prices of goods and services and a rise in the living standards of the population. This view only takes into account GDP growth as an indicator of the increase in wealth of an economy. This indicator and its derivative GDPpercapitado not ensure an adequate distribution of wealth. Thus, these bilateral trade agreements are justified as a strategy for long-term economic growth. Consistent with the above and using the results from eighteen years of the North American Free Trade Agreement, we will evaluate the impact of Mexican GDP growth and if this is sufficient to fulfill the principles of a neoclassical convergence growth model.

Full Text: PDF     DOI: 10.15640/jeds.v2n3a14