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Trade Liberalization and Complementary Domestic Policies: A Rural-Urban General Equilibrium Analysis of Morocco

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  • Lofgren, Hans
  • El-Said, Moataz
  • Robinson, Sherman

Abstract

In this study, a dynamically recursive general equilibrium model of Morocco is used to examine alternative trade and domestic policy scenarios involving the implementation of the EU Association Agreement for the period 1998-2012. The model has a detailed treatment of the agricultural and rural economy in Morocco. The results for the trade liberalization scenarios indicate that tariff unification has small aggregate effects whereas the removal of non-tariff barriers has strong positive aggregate effects: factor incomes and household welfare expand considerably more rapidly than for the base. However, trade liberalization disfavors the rural poor, especially in rainfed areas. We simulate the introduction of complementary domestic policies with a non-distorting transfer program that fully compensates the owners of rainfed resources and skill upgrading for the rural labor force. The results indicate that, if combined with at least one of these complementary domestic policies, trade liberalization can lead to a win-win outcome: the welfare of all household groups increases significantly more rapidly than if status-quo policies are followed.

Suggested Citation

  • Lofgren, Hans & El-Said, Moataz & Robinson, Sherman, 1999. "Trade Liberalization and Complementary Domestic Policies: A Rural-Urban General Equilibrium Analysis of Morocco," TMD Discussion Papers 97540, CGIAR, International Food Policy Research Institute (IFPRI).
    • Handle: RePEc:ags:iffp23:97540
    DOI: 10.22004/ag.econ.97540
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    References listed on IDEAS

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    1. Rutherford, Thomas F. & Rutstrom, E.E. & Tarr, David, 1993. "Morocco's free trade agreement with the European community : a quantitative assessment," Policy Research Working Paper Series 1173, The World Bank.
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    Cited by:

    1. Fida Karam, 2008. "When Migrant Remittances Are Not Everlasting, How Can Morocco Make Up?," Working Papers hal-00304885, HAL.
    2. Acharya, Sanjaya, 2011. "Making unilateral trade liberalisation beneficial to the poor," Socio-Economic Planning Sciences, Elsevier, vol. 45(2), pages 60-71, June.
    3. Alonso, A. & Feltz, N. & Gaspart, F. & Sbaa, M. & Vanclooster, M., 2019. "Comparative assessment of irrigation systems’ performance: Case study in the Triffa agricultural district, NE Morocco," Agricultural Water Management, Elsevier, vol. 212(C), pages 338-348.
    4. Manson Nwafor & Adeola Adenikinju & Kanayo Ogujiuba, 2007. "The Impacts of Trade Liberalization on Poverty in Nigeria: Dynamic Simulations in a CGE Model," Working Papers MPIA 2007-16, PEP-MPIA.
    5. Fida Karam, 2008. "When Migrant Remittances Are Not Everlasting, How Can Morocco Make Up ?," Post-Print halshs-00344833, HAL.
    6. Narayanan, Sudha & Gulati, Ashok, 2002. "Globalization and the smallholders: a review of issues, approaches, and implications," MTID discussion papers 50, International Food Policy Research Institute (IFPRI).
    7. Mustafa Babiker, "undated". "Impacts of Public Policy on Poverty in Arab Countries:Review of the CGE Literature," API-Working Paper Series 0403, Arab Planning Institute - Kuwait, Information Center.
    8. Frey, Miriam & Olekseyuk, Zoryana, 2011. "The EU-Ukraine Trade Liberalization: How much do the costs of tariff elimination matter?," Conference papers 332067, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    9. Ridley, William & Devadoss, Stephen, 2015. "Argentina's Agricultural Policies," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205421, Agricultural and Applied Economics Association.
    10. Yang, Hong & Zehnder, Alexander J. B., 2002. "Water Scarcity and Food Import: A Case Study for Southern Mediterranean Countries," World Development, Elsevier, vol. 30(8), pages 1413-1430, August.
    11. Cissokho, Lassana, 2010. "Dynamic Effects of an Economic Partnership Agreement: Implications for Senegal," 2011 Annual Meeting, February 5-8, 2011, Corpus Christi, Texas 97622, Southern Agricultural Economics Association.

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