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Beyond Border Barriers: The Liberalisation of Services Trade in Tunisia and Egypt

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  • Denise Eby Konan
  • Karl E. Kim

Abstract

Tunisia and Egypt have both recently undertaken significant steps toward trade reform. They have committed to a partnership agreement with the European Union. Both countries have also joined the WTO and are participating in Doha Round discussions on the liberalisation of non-tariff barriers on both goods and services trade. These developments provide an interesting context within which to investigate not only the changes in welfare associated with reforms affecting the trade in goods, but also the impacts of services liberalisation. Using open-economy computable general equilibrium models for both Tunisia and Egypt, this paper explores the reasons why structural differences in these two economies imply different opportunities and challenges with trade reform and services liberalisation. The gains from eliminating barriers at the border for goods trade are significantly greater for Tunisia than Egypt. Both countries, however, gain substantially from liberalisation of foreign direct investment in services. Furthermore, economic growth is more evenly distributed across sectors than with liberalisation of trade in goods alone. In addition to reporting on the impact of alternative policies on income, output, employment and trade, sector-level effects are also considered. Copyright 2004 Blackwell Publishing Ltd.

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  • Denise Eby Konan & Karl E. Kim, 2004. "Beyond Border Barriers: The Liberalisation of Services Trade in Tunisia and Egypt," The World Economy, Wiley Blackwell, vol. 27(9), pages 1429-1447, September.
  • Handle: RePEc:bla:worlde:v:27:y:2004:i:9:p:1429-1447
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    References listed on IDEAS

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    1. Thomas F. Rutherford & E. Elisabet Rutstrom & David Tarr, 2014. "Morocco's free trade agreement with the EU: A quantitative assessment," World Scientific Book Chapters,in: APPLIED TRADE POLICY MODELING IN 16 COUNTRIES Insights and Impacts from World Bank CGE Based Projects, chapter 17, pages 405-437 World Scientific Publishing Co. Pte. Ltd..
    2. Deardorff, Alan V, 2001. "International Provision of Trade Services, Trade, and Fragmentation," Review of International Economics, Wiley Blackwell, vol. 9(2), pages 233-248, May.
    3. Robert C. Feenstra, 1998. "Integration of Trade and Disintegration of Production in the Global Economy," Journal of Economic Perspectives, American Economic Association, vol. 12(4), pages 31-50, Fall.
    4. Hoekman, Bernard & Konan, Denise & Maskus, Keith, 1998. "An Egypt-United States Free Trade Agreement: Economic Incentives and Effects," CEPR Discussion Papers 1882, C.E.P.R. Discussion Papers.
    5. 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.
    6. 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.
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    Cited by:

    1. Lucke, Bernd & Zotti, Jacopo, 2016. "Macroeconomic effects of the Barcelona Initiative," Journal of Policy Modeling, Elsevier, vol. 38(5), pages 837-854.
    2. Christen, Elisabeth & Francois, Joseph & Hoekman, Bernard, 2013. "Computable General Equilibrium Modeling of Market Access in Services," Handbook of Computable General Equilibrium Modeling, Elsevier.
    3. Christen, Elisabeth & Francois, Joseph & Hoekman, Bernard, 2012. "CGE modeling of market access in services," Policy Research Working Paper Series 6106, The World Bank.
    4. World Bank, 2006. "Fostering Higher Growth and Employment in the Kingdom of Morocco," World Bank Publications, The World Bank, number 7114.
    5. Nevine Eid, "undated". "FDI-Growth Relationship: Is Financial Deepening a Pre-condition," EcoMod2006 272100023, EcoMod.
    6. Walkenhorst, Peter & Malouche, Mariem, 2006. "Trade Policy and Export Performance in Morocco," MPRA Paper 23119, University Library of Munich, Germany.

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