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The Free Trade Agreement Morocco-EU: A simulation of the impact on bilateral flows

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Abstract

We analyse the effect due of the next FTA between Morocco and the EU on bilateral Moroccan imports. As our main contribution to the existing literature, we include in our gravity equation tariff data at the industry level. This allows to better estimate trade determinants and also makes possible to perform simulations of the tariff dismantling taking into account its different path for each industry and year. A complete tariff dismantling will double the average yearly trade growth observed in the years just before the transition period to the FTA begun. The average effect follows the tariff reduction schedule being greater at the beginning and at the end of the transition period. The effect is positive for all EU Member States but exports growth to Morocco is greater for Portugal, Greece, Slovakia, Lithuania and Spain and lower for Germany, Denmark, Finland, France and Sweden. By industries, the faster growth are predicted for Leather and leather products, Wood and wood products, Textiles and textile products, Rubber and plastic products and Pulp, paper an paper products and publishing and printing. Finally, we also find a positive effect of Moroccan immigration in the EU on bilateral trade.

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Paper provided by Centro de Estudios Andaluces in its series Economic Working Papers at Centro de Estudios Andaluces with number E2006/23.

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Length: 32 pages
Date of creation: 2006
Date of revision:
Handle: RePEc:cea:doctra:e2006_23

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Keywords: Liberalisation; EU; Morocco; Free Trade Area; Tariff; Immigration; gravity equation;

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  1. Rose, Andrew K, 2002. "Do We Really Know that the WTO Increases Trade?," CEPR Discussion Papers 3538, C.E.P.R. Discussion Papers.
  2. José V. Blanes, 2005. "Does Immigration Help to Explain Intra-Industry Trade? Evidence for Spain," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 141(2), pages 244-270, July.
  3. Haveman, J-D & Hummels, D, 1996. "Trade Creation and Trade Diversion : New Empirical Results," Papers 96-004, Purdue University, Krannert School of Management - Center for International Business Education and Research (CIBER).
  4. Hummels, D. & Levinsohn, J., 1993. "Monopolistic Competition and International Trade: Reconsidering the Evidence," Working Papers 339, Research Seminar in International Economics, University of Michigan.
  5. James E. Rauch & Vitor Trindade, 2002. "Ethnic Chinese Networks In International Trade," The Review of Economics and Statistics, MIT Press, vol. 84(1), pages 116-130, February.
  6. Sourafel Girma & Zhihao Yu, 2002. "The link between immigration and trade: Evidence from the United Kingdom," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 138(1), pages 115-130, March.
  7. Keith Head & John Ries, 1998. "Immigration and Trade Creation: Econometric Evidence from Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 31(1), pages 47-62, February.
  8. Nicolas Péridy & Michael Frudenberg & Lionel Fontagné, 1998. "Commerce international et structures de marché : une vérification empirique," Économie et Prévision, Programme National Persée, vol. 135(4), pages 147-167.
  9. Wagner, Don & Head, Keith & Ries, John, 2002. "Immigration and the Trade of Provinces," Scottish Journal of Political Economy, Scottish Economic Society, vol. 49(5), pages 507-25, December.
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