For modeling purposes, the focus has been on the effects of the removal of FTAA trade
barriers, which lend themselves most readily to quantification. The computational results
presented for the FTAA are therefore best interpreted as providing a lower bound for the potential
benefits involved. We have shown that these benefits are fairly large in absolute and relative
terms for the FTAA countries/regions covered in the model. We also noted that non-trade and
dynamic benefits could add to the welfare gains of the FTAA. But there is a downside to the
FTAA resulting from the adjustment costs that may be experienced and from negative effects of
trade diversion that we have shown may occur. Further, because of the lack of information, we were not able to allow for rules of origin and related restrictive measures that are likely to be
incorporated into the FTAA and that could undermine the welfare benefits of the trade
liberalization. Finally, it appears likely that there may be less than full compliance with the
FTAA negotiating agenda, and that the negotiations may be drawn out over an extended period of
time before some FTAA members may decide to accept full compliance with the FTAA
obligations.