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Journal of Economic Integration 2016 June;31(2) :206-233.
DOI: https://doi.org/10.11130/jei.2016.31.2.206
Deeper Integration or Wider Integration?
: the case of Gulf Cooperation Council
Houcine Boughanmi
Ahmed Al-Shammakhi and 
Alessandro Antimiani 
Sultan Qaboos University, Al-Khod, Oman
European Commission, Brussels, Belgium
Corresponding Author: Houcine Boughanmi ,Tel: +96824141218, Fax: +96824413418, Email: boughanh@squ.edu.om
Copyright ©2016 Journal of Economic Integration
ABSTRACT
We empirically evaluate whether fostering trade partnership within the region is a better economic course of action for the Gulf Cooperation Council than engaging into preferential trade arrangements with well-established trade blocs outside the region. We use the 8.1 version of Global Trade Analysis Project to analyze four scenarios representing various Gulf Cooperation Council trade integration paths, taking into consideration the issue of non-Tariff Barriers and trade facilitation measures. Results indicate that the Gulf Cooperation Council gain from lifting tariffs and non-tariff barriers on trade with the Greater Arab Free Trade Area subgroups and with the European Union is limited unless such barrier lifting is complemented with trade facilitation measures. With trade facilitation, the full completion of Greater Arab Free Trade Area scenario yields the highest welfare gain for the Gulf Cooperation Council, while the Gulf Cooperation Council-European Union Free Trade Agreement scenario yields positive but smaller gain. The small gain with Gulf Cooperation Council-European Union scenario is explained by the negative terms of trade effects following trade liberalization. These results underscore the importance of deepening Greater Arab Free Trade Area’s scope through introduction of trade facilitation measures as well as measures beyond merchandize trade liberalization.

JEL Classification
F10: General
F15: Economic Integration
Keywords: Computable General Equilibrium | Global Trade Analysis Project | Gulf Cooperation Council | Regional integration | MENA
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