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Assessing the impact of the EU-sponsored trade liberalization in the MENA countries

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Author Info
Hagemejer, Jan
Cieslik, Andrzej

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Abstract

The EU-sponsored Barcelona conference in 1995 set the ambitious goal of creating the Euro-Mediterranean Free Trade Area (EUROMED) that would include the European Union and the MENA countries by 2010. The intermediate steps towards building the EUROMED have involved bilateral “vertical” trade liberalization between the EU and the particular MENA countries as well as “horizontal” trade liberalization among themselves. In this paper we evaluate empirically the effects of the new EU Association Agreements with the MENA countries using the augmented gravity equations derived from a variety of neoclassical and new trade theory models and panel data for the period 1980-2004. We find that while these agreements increased significantly imports of the MENA countries from the EU they had no positive impact on their exports to the EU which can be attributed to the asymmetry in trade liberalization between the EU and the MENA countries.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 17721.

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Date of creation: Jun 2009
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Publication status: Published in Journal of Economic Integration 2.24(2009): pp. 344-369
Handle: RePEc:pra:mprapa:17721

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Related research
Keywords: bilateral trade; gravity equation; preferential trade liberalization;

Find related papers by JEL classification:
F11 - International Economics - - Trade - - - Neoclassical Models of Trade
F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies

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References listed on IDEAS
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  3. Simon J. Evenett & Wolfgang Keller, 2002. "On Theories Explaining the Success of the Gravity Equation," Journal of Political Economy, University of Chicago Press, vol. 110(2), pages 281-316, April. [Downloadable!] (restricted)
    Other versions:
  4. Hummels, David & Levinsohn, James, 1995. "Monopolistic Competition and International Trade: Reconsidering the Evidence," The Quarterly Journal of Economics, MIT Press, vol. 110(3), pages 799-836, August. [Downloadable!] (restricted)
    Other versions:
  5. Hassan Al-Atrash & Tarik Yousef, 2000. "Intra-Arab Trade - Is It Too Little?," IMF Working Papers 00/10, International Monetary Fund.
  6. Peridy, Nicolas, 2005. "The trade effects of the Euro-Mediterranean partnership: what are the lessons for ASEAN countries?," Journal of Asian Economics, Elsevier, vol. 16(1), pages 125-139, February. [Downloadable!] (restricted)
  7. Puga, Diego & Venables, Anthony J., 1997. "Preferential trading arrangements and industrial location," Journal of International Economics, Elsevier, vol. 43(3-4), pages 347-368, November. [Downloadable!] (restricted)
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  8. Maskus, Keith E & Konan, Denise Eby, 1997. "Trade Liberalization in Egypt," Review of Development Economics, Blackwell Publishing, vol. 1(3), pages 275-93, October. [Downloadable!] (restricted)
  9. Dennis, Allen, 2006. "The impact of regional trade agreements and trade facilitation in the Middle East and North Africa region," Policy Research Working Paper Series 3837, The World Bank. [Downloadable!]
  10. Alan Deardorff, 1998. "Determinants of Bilateral Trade: Does Gravity Work in a Neoclassical World?," NBER Chapters, in: The Regionalization of the World Economy, pages 7-32 National Bureau of Economic Research, Inc. [Downloadable!]
    Other versions:
  11. Laszlo Matyas, 1997. "Proper Econometric Specification of the Gravity Model," The World Economy, Blackwell Publishing, vol. 20(3), pages 363-368, 05. [Downloadable!] (restricted)
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