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The Cost of non-Maghreb: Achieving the Gains from Economic Integration

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  • Ben Hammouda, Hakim
  • Oulmane, Nassim
  • Bchir, Hédi
  • Sadni Jallab, Mustapha

Abstract

The purpose of this paper is to estimate the impact of the integration of Maghreb countries into a free trade area on the main macroeconomic aggregates. By using the MIRAGE model and MacMap database, we tested different scenarios to estimate the gains or the potential losses of various plans of trade integration (Free trade area for the Maghreb countries, Custom Union between Maghreb countries, Maghreban Common Market). Our study suggests that the overall gains from liberalizing trade in goods (and removing various regulatory non-tariff barriers in the process) could reach at least USD 350 million. The increase in revenue through increases in production and wages would positively affect welfare levels for Maghreb consumers. The dynamic gains from liberalizing trade in goods can outstrip the static gains, with productivity improvements as the main driver. Our analysis shows that the creation of a common market is probably the most interesting and efficient option for the Maghreb countries.

Suggested Citation

  • Ben Hammouda, Hakim & Oulmane, Nassim & Bchir, Hédi & Sadni Jallab, Mustapha, 2006. "The Cost of non-Maghreb: Achieving the Gains from Economic Integration," MPRA Paper 13293, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:13293
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    File URL: https://mpra.ub.uni-muenchen.de/13293/1/MPRA_paper_13293.pdf
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    References listed on IDEAS

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    1. Marie-Ange VEGANZONES-VAROUDAKIS & Mustapha Kamel NABLI, 2004. "Reforms and Growth in MENA Countries:New Empirical Evidence," Working Papers 200431, CERDI.
    2. Philip D. Adams & Karen M. Huff & Robert McDougall & K.R. Pearson & Alan A. Powell, 1996. "Medium- and Long-run Consequences for Australia of an APEC Free Trade Area: CGE Analyses using the GTAP and MONASH Models," Centre of Policy Studies/IMPACT Centre Working Papers g-111, Victoria University, Centre of Policy Studies/IMPACT Centre.
    3. Jeffrey A. Frankel, 1997. "Regional Trading Blocs in the World Economic System," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 72.
    4. Jeffrey A. Frankel & Andrew K. Rose, 2000. "Estimating the Effect of Currency Unions on Trade and Output," NBER Working Papers 7857, National Bureau of Economic Research, Inc.
    5. Bernard M. Hoekman & Patrick Messerlin, 2002. "Initial conditions and incentives for Arab economic integration : can the European Community's success be emulated?," Sciences Po publications WPS2921, Sciences Po.
    6. Tarik Yousef & Hassan Al-Atrash, 2000. "Intra-Arab Trade; Is it too Little?," IMF Working Papers 00/10, International Monetary Fund.
    7. Patrick J. Kehoe & Timothy J. Kehoe, 1994. "A primer on static applied general equilibrium models," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Spr, pages 2-16.
    8. Christian Montet & Mohamed Harfi & Nassim Oulmane, 1997. "Evolution du commerce extérieur français et ajustement des emplois : le rôle de l'intra-branche et de la qualité des produits," Revue Économique, Programme National Persée, vol. 48(5), pages 1145-1164.
    9. Smith, Alasdair & Venables, Anthony J., 1991. "Economic integration and market access," European Economic Review, Elsevier, vol. 35(2-3), pages 388-395, April.
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    Citations

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    Cited by:

    1. Belhadj, ARAM & Bouguezzi, WAJDI & Jedlane, NABIL, 2009. "A Common Monetary Policy For The Maghreb: The Winners and The Losers?," MPRA Paper 29701, University Library of Munich, Germany.
    2. Belhadj, Aam & Eggoh, Jude, 2010. "Co-movements Of Business Cycles In The Maghreb: Does Trade Matter?," MPRA Paper 35778, University Library of Munich, Germany.
    3. Elena Ianchovichina & Maros Ivanic, 2016. "Economic Effects of the Syrian War and the Spread of the Islamic State on the Levant," The World Economy, Wiley Blackwell, vol. 39(10), pages 1584-1627, October.
    4. Khalid Sekkat, 2013. "Is There Anything Special With Intra-Arab Capital Flows?," Working Papers 812, Economic Research Forum, revised Dec 2013.

    More about this item

    Keywords

    Free Trade Area; Maghreb; and CGE Model;

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation

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