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GTAP Resource #2066

"How North Africa could benefit from the euromediterraneen partnership: the necessity to balance the Barcelona Process"
by Ben Hammouda, Hakim, Mohamed Hedi Bchir, Mondher Mimouni and Romain Perez


Abstract
European attention has increasingly been focused on the Mediterranean and on perceived security and economic risks from that area. It has been argued that the euro-med relationship needs to be deepened and strengthened to solve the common problems of that particular region. For that reason a considerable number of initiatives has been launched over the past 10 years to enhance co-operation in the Mediterranean.

This paper seeks to analyze how is it possible to re-equilibrate the Euromed partnership agreement in favor of the North African countries and how North African countries could take a better benefit from this partnership. One of the objectives of this paper is also to determine the modalities to balance the trade relations between theses two regions. One possibility could be to reinforce this free trade area by reducing significantly the high tariffs that EU continue to apply against north African exports. Indeed, a lot of tariff peaks remain present and their elimination could contribute to boost and re-equilibrate this partnership. Another possibility to increase North Africa exports to EU could be to give a duty-free quota free market access to some products where North African countries are very competitive.

A full account of the integration dynamics and the quantification of its effects needs to take into account a wide range of transmission channels. Moreover one has to control for the general equilibrium effects of the changes in production trade patterns, the role played by market structures (i.e. the type of competition) and the degree of factor specificity (which is very important for agriculture) and the degree of substitutability across goods from different sectors and/or country of origin. In order to meet these needs we carry on the analysis using MIRAGE, a multi-region, multi-sector computable general equilibrium model (CGEM) and devoted to trade policy analysis.

Our preliminary results show that a reduction of tariffs coupled with an elimination of export subsidies and to a reduction of the domestic support have a positive impact on North African Economies. The more the tariff reduction is strong, the more the gains for North Africa are strong. One also notice that it contributes to increase the agricultural exports, in particular vegetables, rice, oil, sugar and cereal. Without any surprise, these products are strongly subsidized in Europe. A significant reduction even a full elimination would definitely contribute to counterbalance the trade between theses two regions.


Resource Details (Export Citation) GTAP Keywords
Category: 2006 Conference Paper
Status: Published
By/In: Presented at the 9th Annual Conference on Global Economic Analysis, Addis Ababa, Ethiopia
Date:
Version:
Created: Ben Hammouda, H. (5/1/2006)
Updated: Batta, G. (5/1/2006)
Visits: 2,054
No keywords have been specified.


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