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Deep Integration, Non-Discrimination and Euro-Mediterranean Free Trade

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  • Hoekman, Bernard
  • Konan, Denise

Abstract

Key questions in evaluating the justification for free trade agreements (FTAs) are whether formal international cooperation is necessary to promote greater contestability of markets through harmonization or recognition of regulatory regimes ("deep integration"), and whether any actions taken to reduce market segmentation are applied on a nondiscriminatory basis. This paper investigates the potential importance of deep integration in the context of trade agreements the EU has concluded with Mediterranean countries. Using a standard competitive general equilibrium model of the Egyptian economy, we find that the static welfare impact of a deep FTA is a multiple of what can be obtained from a classic "shallow" agreement; in some scenarios welfare may increase by more than 10 percent of GDP, compared to close to zero under a shallow agreement.

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Bibliographic Info

Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 2095.

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Date of creation: Mar 1999
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Handle: RePEc:cpr:ceprdp:2095

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Keywords: Arab league; deep integration; Egypt; Non-Tariff Barriers; preferential trade agreements; Trade in Services;

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References

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  1. Djankov, Simeon & Hoekman, Bernard, 1996. "Effective Protection and Investment Incentives in Egypt and Jordan During the Transition to Free Trade with Europe," CEPR Discussion Papers 1415, C.E.P.R. Discussion Papers.
  2. Denise Eby Konan & Keith Maskus, 1997. "Joint Trade Liberalization and Tax Reform in a Small Open Economy: The Case of Egypt," Working Papers 199703-R, University of Hawaii at Manoa, Department of Economics.
  3. Denise Eby Konan & Keith Maskus, 1997. "Is Small Beautiful? Trade Shares and Trade Creation with Differentiated Products," Working Papers 199706, University of Hawaii at Manoa, Department of Economics.
  4. Schiff, Maurice, 1997. "Small is Beautiful: Preferential Trade Agreements and the Impact of Country Size, Market Share, and Smuggling," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 12, pages 359-387.
  5. Robinson, Sherman & Gehlhar, Clemen G., 1995. "Land, water, and agriculture in Egypt: the economywide impact of policy reform," TMD discussion papers 1, International Food Policy Research Institute (IFPRI).
  6. Maskus, Keith E & Konan, Denise Eby, 1997. "Trade Liberalization in Egypt," Review of Development Economics, Wiley Blackwell, vol. 1(3), pages 275-93, October.
  7. Bernard Hoekman & Denise Konan & Keith Maskus, 1998. "An Egypt-U.S. Free Trade Agreement: Economic Incentives and Effects," Working Papers 199802, University of Hawaii at Manoa, Department of Economics.
  8. de Melo, Jaime & Robinson, Sherman, 1989. "Product differentiation and the treatment of foreign trade in computable general equilibrium models of small economies," Journal of International Economics, Elsevier, vol. 27(1-2), pages 47-67, August.
  9. Schiff, Maurice, 1996. "Small is beautiful : preferential trade agreements and the impact of country size, market share, efficiency, and trade policy," Policy Research Working Paper Series 1668, The World Bank.
  10. Denise Eby Konan & Keith E Maskus, 1997. "A Computable General Equilibrium Analysis of Egyptian Trade Liberalization Scenarios," Working Papers 199701, University of Hawaii at Manoa, Department of Economics.
  11. Harrison, Glenn W. & Jones, Richard & Kimbell, Larry J. & Wigle, Randal, 1993. "How robust is applied general equilibrium analysis?," Journal of Policy Modeling, Elsevier, vol. 15(1), pages 99-115, February.
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Citations

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Cited by:
  1. Elisabeth M. Christen & Joseph Francois & Bernard Hoekman, 2012. "CGE Modeling of Market Access in Services," Economics working papers 2012-08, Department of Economics, Johannes Kepler University Linz, Austria.
  2. Bensassi, Sami & Márquez-Ramos, Laura & Martínez-Zarzoso, Inmaculada, 2010. "Economic integration and the two margins of trade: the impact of the Barcelona Process on North African countries’ exports," MPRA Paper 27117, University Library of Munich, Germany.
  3. Francois, Joseph & Hoekman, Bernard, 2009. "Services Trade and Policy," CEPR Discussion Papers 7616, C.E.P.R. Discussion Papers.
  4. Zaki, Chahir, 2010. "Towards an explicit modeling of trade facilitation in CGE models: evidence from Egypt," MPRA Paper 23353, University Library of Munich, Germany, revised 14 Jun 2010.
  5. Lucian Cernat, 2001. "ASSESSING REGIONAL TRADE ARRANGEMENTS: ARE SOUTH–SOUTH RTAs MORE TRADE DIVERTING?," International Trade 0109001, EconWPA.
  6. Konan, Denise Eby & Maskus, Keith E., 2000. "Joint trade liberalization and tax reform in a small open economy: the case of Egypt," Journal of Development Economics, Elsevier, vol. 61(2), pages 365-392, April.
  7. Hoekman, Bernard & Mattoo, Aaditya, 2006. "Services, Economic Development and the Doha Round: Exploiting the Comparative Advantage of the WTO," CEPR Discussion Papers 5628, C.E.P.R. Discussion Papers.
  8. Denise Eby Konan & Keith E Maskus, 2000. "Bilateral Trade Patterns and Welfare: An Egypt-EU Preferential Trade Agreement," Working Papers 200001, University of Hawaii at Manoa, Department of Economics.
  9. Daniel Müller-Jentsch, 2005. "Deeper Integration and Trade in Services in the Euro-Mediterranean Region : Southern Dimensions of the European Neighborhood Policy," World Bank Publications, The World Bank, number 7335, July.
  10. Francois, Joseph F. & McQueen, Matthew & Wignaraja, Ganeshan, 2005. "European Union-developing country FTAs: overview and analysis," World Development, Elsevier, vol. 33(10), pages 1545-1565, October.
  11. Jose R. Lopez-Calix & Peter Walkenhorst & Ndiame Diop, 2010. "Trade Competitiveness of the Middle East and North Africa : Policies for Export Diversification," World Bank Publications, The World Bank, number 2466, July.
  12. Alessandrini, Sergio & Resmini, Laura, 2000. "FDI in the Mediterranean Region: a Comparison with CEE Experience," MPRA Paper 26103, University Library of Munich, Germany.
  13. Ram Upendra Das, 2009. "Regional Economic Integration in South Asia : Prospects and Challenges," Macroeconomics Working Papers 22987, East Asian Bureau of Economic Research.

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