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GTAP Resource #4686

"Mega Deals: What Consequences for sub-Saharan Africa?"
by Guimbard, Houssein and Maëlan Le Goff

In 2013, a new wave of RTAs negotiations (Mega Deals), involving the largest countries in the world, has been launched: the European Union (EU) with Japan (EU-Japan) and with the USA (Transatlantic Trade and Investment Partnership, TTIP) and a pacific agreement involving China, Japan, the USA, among others (The Trans-Pacific Partnership, TPP). The sub-Saharan African countries (SSA) are totally excluded from those negotiations: they might however undergo important economic impacts, as their exports remain dependant from those large markets. Hence, the aim of this paper is to evaluate, using a dynamic Computable General Equilibrium Model (CGEM, nicknamed MIRAGE), the consequences for SSA countries in the case of Mega Deals successful negotiations, focusing on market access on goods through tariffs and Non-tariff measures (NTMs).

Our paper contributes to the empirical literature on Mega Deals in three ways. First, to our knowledge, it is the only quantitative assessment of the impact of those large negotiations on sub-Saharan African countries, explicitly modeled. Second, we use recent and detailed tariffs data (MAcMap-HS6) to design our scenarios, taking into account all trade preferences. Finally, we provide some trade policy options for SSA countries, e.g. trade liberalization within Africa or some stylized trade agreements with other regions that could dampen the effects of Mega Deals on SSA economies.

Our results show the negative impact of the Mega Deals on the welfare of sub-Saharan countries (-0.31% in 2025, as compared to the baseline). Moreover, they reveal that regional integration (the “Tripartite” RTA) in Africa tends to limit losses due to Mega Deals. A continental RTA involving all SSA countries will slightly overcome losses due to the Mega deals. In this framework, we also show that openness of African countries towards Asia could be a potential solution to avoid trade diversion....

Resource Details (Export Citation) GTAP Keywords
Category: 2015 Conference Paper
Status: Published
By/In: Presented at the 18th Annual Conference on Global Economic Analysis, Melbourne, Australia; CEPII
Date: 2014
Created: Guimbard, H. (4/14/2015)
Updated: Guimbard, H. (4/14/2015)
Visits: 1,409
- Non-Tariff barriers
- Preferential trading arrangements
- Africa (Central)
- Africa (East)
- Africa (Southern)
- Africa (West)

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