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Catching Up With Eastern Europe? The European Union's Mediterranean Free Trade Initiative

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  • B. Hoekman

    ()
    (The World Bank)

  • S. Djankov

Abstract

This paper discusses the potential role of a Euro-Mediterranean Agreement (EMA) in helping Middle East and North African governments implement structural economic reforms. The arguments for and against preferential liberalization are summarized, identifying a number of necessary conditions for an EMA to benefit a Mediterranean country. The recently negotiated EMA between Tunisia and the EU is evaluated, using these conditions as criteria. Some doubts are expressed regarding the benefits of an EMA and the extent it will help countries in the region 'catch up' with those in Central and Eastern Europe. Significant supporting and complementary actions are likely to be needed. Key issues in this connection are the regulatory regimes applying to inward foreign direct investment (FDI) and the service sector; a reduction in tariffs applied to the rest of the world; and the imposition of hard budget constraints on state-owned enterprises. These aspects are not subject to disciplines under the EMA.

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Bibliographic Info

Paper provided by Economic Research Forum in its series Working Papers with number 9612.

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Date of creation: Apr 1996
Date of revision: Apr 1996
Publication status: Published by The Economic Research Forum (ERF)
Handle: RePEc:erg:wpaper:9612

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  1. Jeffrey Sachs & Andrew Warner, 1995. "Economic Reform and the Progress of Global Integration," Harvard Institute of Economic Research Working Papers 1733, Harvard - Institute of Economic Research.
  2. Hoekman, Bernard & Leidy, Michael P, 1993. "Holes and Loopholes in Integration Agreements: History and Prospects," CEPR Discussion Papers 748, C.E.P.R. Discussion Papers.
  3. Dani Rodrik, 1992. "The Rush to Free Trade in the Developing World: Why So Late? Why Now? Will it Last?," NBER Working Papers 3947, National Bureau of Economic Research, Inc.
  4. Hoekman, Bernard, 1995. "The WTO, the EU and the Arab World: Trade Policy Priorities and Pitfalls," CEPR Discussion Papers 1226, C.E.P.R. Discussion Papers.
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Cited by:
  1. Konan, Denise Eby & Maskus, Keith E., 2003. "Quantifying the impact of services liberalization in a developing country," Policy Research Working Paper Series 3193, The World Bank.
  2. Alessandrini, Sergio & Resmini, Laura, 2000. "FDI in the Mediterranean Region: a Comparison with CEE Experience," MPRA Paper 26103, University Library of Munich, Germany.
  3. Iván Martín, 2004. "La inversión extranjera directa en los países del Maghreb en el marco de la Asociación Euromediterránea: ¿el eslabón perdido?," International Trade 0405001, EconWPA.
  4. Yener Kandogan, 2005. "Trade Creation and Diversion Effects of Europe’s Regional Liberalization Agreements," William Davidson Institute Working Papers Series wp746, William Davidson Institute at the University of Michigan.
  5. Hoekman, Bernard & Subramanian, Arvind, 1996. "Egypt and the Uruguay Round," Policy Research Working Paper Series 1597, The World Bank.

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