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Some Simple Analytics of the Trade and Welfare Effects of Economic Partnership Agreements

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  • Chris Milner
  • Oliver Morrissey
  • Andrew McKay

Abstract

The Cotonou Agreement, successor to the Lomé Convention, offers African, Caribbean and Pacific (ACP) countries preferential access to EU markets by establishing economic partnership agreements (EPAs) between the EU and blocks of ACP countries that are members of regional trading arrangements. ACP countries entering such arrangements could retain preferential access to the EU market, but on a reciprocal basis. This paper presents a relatively simple method (with moderate data requirements) to measure the likely short-run welfare consequences, static effects on trade flows and tariff revenue, of such an arrangement for ACP countries. The partial equilibrium method is illustrated for the case of the East African Cooperation (Kenya, Tanzania and Uganda). The analysis suggests that the welfare effects (excluding revenue effects) from a reciprocal agreement with the EU will be small, whether positive or negative, but ACP countries will experience short-run adjustment costs, especially in the form of revenue losses. Copyright 2005, Oxford University Press.

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Bibliographic Info

Article provided by Centre for the Study of African Economies (CSAE) in its journal Journal of African Economies.

Volume (Year): 14 (2005)
Issue (Month): 3 (September)
Pages: 327-358

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Handle: RePEc:oup:jafrec:v:14:y:2005:i:3:p:327-358

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Cited by:
  1. Borrmann, Axel & Busse, Matthias & de la Rocha, Manuel, 2007. "Consequences of economic: Partnership agreements between East and Southern African countries and the EU for inter- and intra-regional integration," HWWI Research Papers 2-8, Hamburg Institute of International Economics (HWWI).
  2. Souleymane COULIBALY, 2006. "Evaluating the Trade and Welfare Effects of Developing RTAs," Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP) 06.03, Université de Lausanne, Faculté des HEC, DEEP.
  3. Karingi, Stephen & Oulmane, Nassim & Lang, Rémi & Sadni Jallab, Mustapha & Perez, Romain, 2005. "Assessment of the impact of the Economic Partnership Agreement between the ECOWAS countries and the European Union," MPRA Paper 13292, University Library of Munich, Germany.
  4. Lionel Fontagné & David Laborde & Cristina Mitaritonna, 2009. "An Impact Study of the Economic Partnership Agreements (EPAs) in the Six ACP Regions," Working Papers halshs-00967434, HAL.
  5. Chris Milner & Oliver Morrissey & Evious Zgovu, 2011. "Designing Economic Partnership Agreements To Promote Intra‐Regional Trade In Acp Countries," South African Journal of Economics, Economic Society of South Africa, vol. 79(4), pages 376-391, December.
  6. Mustapha Sadni Jallab & Lahsen Abdelkmalki & René Sandretto, 2007. "The Free Trade Agreement Between the United States and Morocco. The Importance of a Gradual and Assymetric Agreement," Post-Print halshs-00359098, HAL.
  7. Sukati, Mphumuzi, 2011. "The SADC region and EPA/EBAI – trade balance analysis," MPRA Paper 31992, University Library of Munich, Germany.
  8. Sukati, Mphumuzi A, 2010. "The Economic Partnership Agreements (EPAs) and the Southern African Customs Union (SACU) Region- The Case for South Africa," MPRA Paper 25103, University Library of Munich, Germany.
  9. Oliver Morrissey, & Evious Zgovu, . "The Impact of Economic Partnership Agreements on ACP Agriculture Imports and Welfare," Discussion Papers 07/09, University of Nottingham, CREDIT.
  10. Ben Hammouda, Hakim & Karingi, Stephen & Ouedraogo, Ben Idrissa & Oulmane, Nassim & Sadni Jallab, Mustapha, 2006. "Assessing the Consequences of the Economic Partnership Agreement on the Ethiopian Economy," MPRA Paper 13361, University Library of Munich, Germany.
  11. Karingi, Stephen & Perez, Romain & Oulmane, Nassim & Lang, Rémi & Sadni Jallab, Mustapha, 2006. "Assessment of the Impact of the Economic Partnership Agreement between the COMESA countries and the European Union," MPRA Paper 13294, University Library of Munich, Germany.
  12. Brenton, Paul & Saborowski, Christian & Staritz, Cornelia & von Uexkull, Erik, 2009. "Assessing the adjustment implications of trade policy changes using TRIST (tariff reform impact simulation tool)," Policy Research Working Paper Series 5045, The World Bank.

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