Economic Implications of Europe-Maghreb Trade Agreements
This paper reviews the various economic effects on Algeria of accepting the European Union's invitation to enter into an economic partnership, as has already been done by two other countries of the Maghreb, Morocco and Tunisia. These Euro-Mediterranean partnerships consist primarily of the formation of free trade areas, FTAs, including the EU and the country involved, so my analysis is devoted primarily to the economic effects of an FTA. However, the occasion of forming an FTA also provides an opportunity to undertake several additional steps toward integration, which I also examine. These are 1) deeper integration, 2) extension of the FTA to include other neighboring countries, and 3) reductions in tariffs on imports from the rest of the world. The paper concludes that an EU-Algeria FTA would probably be good for Algeria, but the benefits can be substantially enhanced and the costs reduced by pursuing also one or more of these additional steps.
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