IDEAS home Printed from https://ideas.repec.org/p/gta/workpp/1643.html
   My bibliography  Save this paper

A Comparative Analysis of the EU-Morocco FTA vs. Multilateral Liberalization

Author

Listed:
  • Elbehri, Aziz
  • Hertel, Thomas

Abstract

An applied general equilibrium model with oligopoly and scale economies, based on detailed plant-level data, is used to contrast the impacts of the Morocco-EU free trade area (FTA) to multilateral trade liberalization on Morocco’s economy. Simulation results show that the FTA agreement is likely to have adverse effects on Morocco due to: (a) deteriorating terms of trade, (b) reductions in output per firm in industries dominated by scale economies, (c) diversion of imports away from non-EU suppliers, and (d) potentially adverse effects on the aggregate demand for labor. We contrast this FTA with a multilateral liberalization scenario along the lines of those proposed under the Doha Development Round and find this more beneficial to Morocco, with overall welfare gains due to: (a) lesser terms of trade losses, (b) positive scale effects, (c) non-preferential liberalization of imports into Morocco, and (d) a positive impact on aggregate labor demand. We conclude that Morocco would be better off pursuing trade liberalization in the multilateral arena.

Suggested Citation

  • Elbehri, Aziz & Hertel, Thomas, 2004. "A Comparative Analysis of the EU-Morocco FTA vs. Multilateral Liberalization," GTAP Working Papers 1643, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
  • Handle: RePEc:gta:workpp:1643 Note: GTAP Working Paper No. 30
    as

    Download full text from publisher

    File URL: https://www.gtap.agecon.purdue.edu/resources/res_display.asp?RecordID=1643
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. John Whalley & Shunming Zhang, 2004. "Inequality Change in China and (Hukou) Labour Mobility Restrictions," NBER Working Papers 10683, National Bureau of Economic Research, Inc.
    2. William L. Parish & Xiaoye Zhe & Fang Li, "undated". "Nonfarm Work and Marketization of the Chinese Countryside," University of Chicago - Population Research Center 95-6, Chicago - Population Research Center.
    3. Kanbur, Ravi & Zhang, Xiaobo, 2001. "Fifty Years of Regional Inequality in China: A Journey through Revolution, Reform and Openness," CEPR Discussion Papers 2887, C.E.P.R. Discussion Papers.
    4. Kym Anderson & Jikun Huang & Elena Ianchovichina, 2002. "Impact of ChinaÂ’s WTO Accession on Farm-Nonfarm Income Inequality and Rural Poverty," Centre for International Economic Studies Working Papers 2002-11, University of Adelaide, Centre for International Economic Studies.
    5. Fan Zhai & Zhi Wang, 2002. "WTO Accession, Rural Labour Migration and Urban Unemployment in China," Urban Studies, Urban Studies Journal Limited, vol. 39(12), pages 2199-2217, November.
    6. Zhao, Yaohui, 1999. "Labor Migration and Earnings Differences: The Case of Rural China," Economic Development and Cultural Change, University of Chicago Press, vol. 47(4), pages 767-782, July.
    7. Kym Anderson & Jikun Huang & Elena Ianchovichina, 2002. "Impact of ChinaÂ’s WTO Accession on Farm-Nonfarm Income Inequality and Rural Poverty," Centre for International Economic Studies Working Papers 2002-11, University of Adelaide, Centre for International Economic Studies.
    8. Shoven,John B. & Whalley,John, 1992. "Applying General Equilibrium," Cambridge Books, Cambridge University Press, number 9780521266550, December.
    9. Shaohua Chen & Martin Ravallion, 2004. "Welfare Impacts of China's Accession to the World Trade Organization," World Bank Economic Review, World Bank Group, vol. 18(1), pages 29-57.
    10. Anderson, Kym & Huang, Jikun & Ianchovichina, Elena, 2004. "Will China's WTO accession worsen farm household incomes?," China Economic Review, Elsevier, vol. 15(4), pages 443-456.
    11. Li Shantong & Zhai Fan, 2002. "China's WTO Accession and Implications for its Regional Economies," Economie Internationale, CEPII research center, issue 92, pages 67-102.
    12. Elena Ianchovichina & Will Martin, 2004. "Impacts of China's Accession to the World Trade Organization," World Bank Economic Review, World Bank Group, vol. 18(1), pages 3-27.
    13. Tao Yang, Dennis, 1997. "China's land arrangements and rural labor mobility," China Economic Review, Elsevier, vol. 8(2), pages 101-115.
    14. Yaohui Zhao, 1999. "Leaving the Countryside: Rural-to-Urban Migration Decisions in China," American Economic Review, American Economic Association, vol. 89(2), pages 281-286, May.
    15. Wang, Zhi & Zhai, Fan, 1998. "Tariff Reduction, Tax Replacement, and Implications for Income Distribution in China," Journal of Comparative Economics, Elsevier, vol. 26(2), pages 358-387, June.
    16. Wang, Xiaolu & Kalirajan, K. P., 2002. "On explaining China's rural sectors' productivity growth," Economic Modelling, Elsevier, vol. 19(2), pages 261-275, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mouna Cherkaoui & Ayache Khellaf & Abdelaziz Nihou, 2011. "The Price Effect of Tariff Liberalization in Morocco: Measuring the Impact on Household Welfare," Working Papers 637, Economic Research Forum, revised 10 Jan 2011.
    2. Sadni Jallab, Mustapha & Abdelmalki, Lahsen, 2007. "The Free Trade Agreement Between the United States and Morocco: The Importance of a Gradual and Assymetric Agreement," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 22, pages 852-887.
    3. Hess, Sebastian, 2005. "An Econometric Model of CGE Simulations," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24713, European Association of Agricultural Economists.
    4. Biswajit Nag & Chandrima Sikdar, 2015. "Impact of India-ASEAN Free Trade Agreement: A Cross-Country Analysis using Applied General Equilibrium Modelling," Working Papers id:6624, eSocialSciences.
    5. Kavallari, Aikaterini & Schmitz, P. M., 2010. "Preference erosion effects on the agricultural sector of the EU’s Mediterranean Partner Countries," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 11(2), June.
    6. Sabine Mage-Bertomeu, 2006. "Les modèles d'équilibre général appliqués à la politique commerciale : développements récents," Revue d'économie politique, Dalloz, vol. 116(3), pages 357-381.
    7. Kavallari, Aikaterini & Borresch, Rene & Schmitz, P. Michael, 2006. "Modelling agricultural policy reforms in the Mediterranean basin - Adjustments of AGRISIM," 98th Seminar, June 29-July 2, 2006, Chania, Crete, Greece 10074, European Association of Agricultural Economists.

    More about this item

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gta:workpp:1643. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jeremy Douglas). General contact details of provider: http://edirc.repec.org/data/gtpurus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.