Tariff Policy Assessment: An application to the Free Trade Agreement between Colombia and U.S.

Computable general equilibrium models have been widely used in tariff policy assessment as a tool for the analysis and evaluation of scenarios, with the aim to ascertain the effects of these policies on the economy. This paper reviews the assessments to the Free Trade Agreement between Colombia and the United States (FTA), showing the advantages, disadvantages and different modeling alternatives. The diversity of the results in the evaluation of the possible effects of the FTA is found to arise from three sources: the structure of the model, the Armington elasticities and sectoral aggregation.