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Towards a New Trade Policy Between the USA and Middle‐East Countries:Estimating Trade Resistance and Export Potential

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  • Nicolas Péridy

Abstract

At the time of the conclusion of free trade areas (FTAs) between the USA and Middle‐East and North African (MENA) countries, there is a lack of literature concerning the measurement of the current US export position with regards to these countries, and the US export potential in this area. From recent developments of gravity models, this paper derives an estimable equation which includes various trade resistance variables, notably border effects, multilateral resistance as well as specific bilateral effects. The model is tested in order to scrutinise the impact of these variables on US exports to MENA countries, as well as the US export potential in this area. To that end, a selection of panel data specifications is proposed, mainly Hausman and Taylor models as well as Arellano and Bond dynamic models. Results unambiguously indicate that as compared to the other OECD countries, the USA suffers from a substantial trade integration deficit with MENA countries. This is reflected by the strongly negative values of the US‐MENA bilateral fixed effects, as well as the high bilateral border effects. In addition, the estimated actual/potential US export ratio to these countries is only 0.76. Therefore, implementing an FTA between the USA and MENA countries may allow the former to progressively improve its export position in this area. This would also help MENA countries diversify their supplying sources.

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  • Nicolas Péridy, 2005. "Towards a New Trade Policy Between the USA and Middle‐East Countries:Estimating Trade Resistance and Export Potential," The World Economy, Wiley Blackwell, vol. 28(4), pages 491-518, April.
    • Handle: RePEc:bla:worlde:v:28:y:2005:i:4:p:491-518
    DOI: 10.1111/j.1467-9701.2005.00689.x
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    2. Chevassus-Lozza, Emmanuelle & Latouche, Karine & Majkovic, Darja & Unguru, Manuela, 2008. "The importance of EU-15 borders for CEECs agri-food exports: The role of tariffs and non-tariff measures in the pre-accession period," Food Policy, Elsevier, vol. 33(6), pages 595-606, December.
    3. Charlotte Emlinger & Florence Jacquet & Emmanuelle Chevassus Lozza, 2008. "Tariffs and other trade costs: assessing obstacles to Mediterranean countries' access to EU-15 fruit and vegetable markets," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 35(4), pages 409-438, December.

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