Our results may need to be qualified even further since there are a number of non-trade
issues of policy reform and institutional changes related to the FTAA that will require careful
assessment in terms of the benefits and costs to individual FTAA member countries. We have
not made allowance for these non-trade benefits/costs in our analysis. Also, no account has been
taken of possible increases in foreign direct investment in the FTAA members in response to the
incentives provided by the FTAA trade liberalization, and no allowance has been made for
possible increases in capital formation and economic growth and improvements in productivity that the FTAA may engender. It is possible of course that the non-trade and dynamic growth and
productivity benefits of the FTAA could turn out to be significant and thus reinforce the benefits
of the FTAA trade liberalization and more than offset the costs of adjustment and trade diversion.
But it would take several years of experience following the implementation of the FTAA before
such an evaluation is possible