The welfare implications of trade liberalisation between the Southern Mediterranean and the EU
نویسندگان
چکیده
This paper explores the impact on the Southern Mediterranean Countries (SMC) of the current process of trade liberalisation with the European Union. The methodology is that of computable general equilibrium modelling under imperfect competition and the model includes 10 countries and 11 sectors. This allows for both a cross-country and cross-sectoral analysis of the results. The experiments considered are the full liberalisation of tariffs, as well as changes in market access and trade induced changes in productivity. A further feature of the paper is that we allow for the phased introduction of tariff reductions as explicitly envisaged in the Agreeements. The results show that the process of liberalisation may have a substantial, though non monotonic, impact on the SMC economies in terms of both changes in production and through this on welfare. The welfare impact is potentially very high in particular for the high tariff economies. The sources of the welfare gain tend to derive from perfectly competitive explanations of trade for the high tariff economies, and from imperfectly competitive explanations of trade for the low tariff economies. Contact: Michael Gasiorek School of European Studies University of Sussex Falmer, Brighton, BN1 6GJ Email: [email protected] Tel: 01273 877101 The welfare implications of trade liberalisation between the Southern Mediterranean and the EU
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