Potential gains for Bolivia of the subscription of an Association Agreement with the European Union

Abstract

The liberalization trading has become a really important factor to determine both, the economic growth and the level of poverty in a country. It can be observed that in developed countries, international trading is essential, while in most of the developing countries do not get the same benefits. Although commercial openness could not raise the economic welfare in the same proportion in all of the countries where it was applied, it is still a model used in order to achieve development. The following paper looks for determining, theorically and empirically, the impacts of an Association Agreement with the European Union over the economy in general and the poverty levels. Then, a specific case is used, when talking about the impacts on the exports of quinoa and the benefits that the raise in the exports of this product can bring to the rural communities that produce it. The paper concludes that the only way to get the benefits of the Association Agreement with the European Union is to diversify the products that Bolivia exports and use more modern technology that can give the products a higher aggregate value.