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Deep Integration, Non-Discrimination and Euro-Mediterranean Free Trade

  • Hoekman, Bernard
  • Konan, Denise

Key questions in evaluating the justification for free trade agreements (FTAs) are whether formal international cooperation is necessary to promote greater contestability of markets through harmonization or recognition of regulatory regimes ("deep integration"), and whether any actions taken to reduce market segmentation are applied on a nondiscriminatory basis. This paper investigates the potential importance of deep integration in the context of trade agreements the EU has concluded with Mediterranean countries. Using a standard competitive general equilibrium model of the Egyptian economy, we find that the static welfare impact of a deep FTA is a multiple of what can be obtained from a classic "shallow" agreement; in some scenarios welfare may increase by more than 10 percent of GDP, compared to close to zero under a shallow agreement.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 2095.

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Date of creation: Mar 1999
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Handle: RePEc:cpr:ceprdp:2095
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  1. Maskus, Keith E & Konan, Denise Eby, 1997. "Trade Liberalization in Egypt," Review of Development Economics, Wiley Blackwell, vol. 1(3), pages 275-93, October.
  2. Schiff, Maurice, 1997. "Small is Beautiful: Preferential Trade Agreements and the Impact of Country Size, Market Share, and Smuggling," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 12, pages 359-387.
  3. 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.
  4. 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.
  5. Hoekman, Bernard & Djankov, Simeon, 1997. "Effective protection and investment incentives in Egypt and Jordan during the transition to free trade With Europe," World Development, Elsevier, vol. 25(2), pages 281-291, February.
  6. Harrison, Glenn W. & Jones, Richard & Kimbell, Larry J. & Wigle, Randal, 1993. "How robust is applied general equilibrium analysis?," Journal of Policy Modeling, Elsevier, vol. 15(1), pages 99-115, February.
  7. Schiff, Maurice, 1996. "Small is beautiful : preferential trade agreements and the impact of country size, market share, efficiency, and trade policy," Policy Research Working Paper Series 1668, The World Bank.
  8. de Melo, Jaime & Robinson, Sherman, 1989. "Product differentiation and the treatment of foreign trade in computable general equilibrium models of small economies," Journal of International Economics, Elsevier, vol. 27(1-2), pages 47-67, August.
  9. Robinson, Sherman & Gehlhar, Clemen G., 1995. "Land, water, and agriculture in Egypt: the economywide impact of policy reform," TMD discussion papers 1, International Food Policy Research Institute (IFPRI).
  10. Denise Eby Konan & Keith E Maskus, 1997. "A Computable General Equilibrium Analysis of Egyptian Trade Liberalization Scenarios," Working Papers 199701, University of Hawaii at Manoa, Department of Economics.
  11. Denise Eby Konan & Keith Maskus, 1997. "Is Small Beautiful? Trade Shares and Trade Creation with Differentiated Products," Working Papers 199706, University of Hawaii at Manoa, Department of Economics.
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