The above results give some idea as to the stakes involved in the bilateral FTAs; the extent of export similarity will determine the degree to which the successful negotiation of one FTA within the framework of the EAI might potentially impact negatively on others. Indeed, the decision to form an FTA with the United States is no longer a matter of weighing the costs and benefits of the FTA itself, in terms of greater margins of preference in the U.S. market, as might have been
the case if FTAs were an “exception” (as in the past), but rather a question of preserving mostfavoured nation status. In this section, we consider more directly the economic effects of this decision to form an FTA with the United States using three approaches: (a) a large gravity model; (b) a review of the results using a typical Computational General Equilibrium (CGE) model; and (3) a disaggregated approach which, we would argue, is more useful in determining the economic effects of the EAI from the viewpoint of business people.