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The welfare implications of trade liberalization between the Southern Mediterranean and the EU

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Author Info
Patricia Augier
Michael Gasiorek

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Abstract

The impact on the Southern Mediterranean Countries (SMC) of the current process of trade liberalization with the European Union is explored. The methodology is that of computable general equilibrium modelling under imperfect competition and the model includes ten countries and 11 sectors. This allows for both a cross-country and cross-sectoral analysis of the results. The experiments considered are the full liberalization of tariffs, as well as changes in market access and trade-induced changes in productivity. A key feature of the paper is that the phased introduction of tariff reductions is allowed for as explicitly envisaged in the Agreements. The results show that the process of liberalization may have a substantial, though non-monotonic, impact on the SMC economies in terms of both changes in production and through this on welfare. The welfare impact is potentially very high in particular for the high tariff economies. The sources of the welfare gain tend to derive from perfectly competitive explanations of trade for the high tariff economies, and from imperfectly competitive explanations of trade for the low tariff economies.

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Article provided by Taylor and Francis Journals in its journal Applied Economics.

Volume (Year): 35 (2003)
Issue (Month): 10 (January)
Pages: 1171-1190
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Handle: RePEc:taf:applec:v:35:y:2003:i:10:p:1171-1190

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  1. Marijke Kuiper, 2004. "Fifty ways to leave your protection: comparing applied models of the Euro-Mediterannean association agreements," ENARPRI Working Papers 006, ENARPRI (European Network of Agricultural and Rural Policy Research Institutes). [Downloadable!]
  2. Kavallari, Aikaterini & Schmitz, P. Michael, 2007. "An Empirical Assessment of Agricultural Trade Policies in the Mediterranean Basin - Regional Effects on the EU Member States," 103rd Seminar, April 23-25, 2007, Barcelona, Spain 9395, European Association of Agricultural Economists. [Downloadable!]
  3. Chun-Chu Liu, 2006. "A computable general equilibrium model of the southern region of Taiwan: the impact of the Tainan science-based industrial park," Applied Economics, Taylor and Francis Journals, vol. 38(14), pages 1655-1661, August. [Downloadable!] (restricted)
  4. Kavallari, Aikaterini & Borresch, Rene & Schmitz, Michael, 2006. "Modelling agricultural policy reforms in the Mediterranean basin - Adjustments of AGRISIM," 98th Seminar, June 29-July 2, 2006, Chania, Crete, Greece 10074, European Association of Agricultural Economists. [Downloadable!]
  5. Hagemejer, Jan & Cieslik, Andrzej, 2009. "Assessing the impact of the EU-sponsored trade liberalization in the MENA countries," MPRA Paper 17721, University Library of Munich, Germany. [Downloadable!]
  6. Kavallari, A. & Schmitz, P.M., 2008. "Multilateral trade liberalisation and Preference erosion: Effects on the agricultural sector of the EU's Mediterranean Partner Countries," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 44177, European Association of Agricultural Economists. [Downloadable!]
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