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Journal of Economic Integration 2009 June;24(2) :343-368.
DOI: https://doi.org/10.11130/jei.2009.24.2.343
Assessing the Impact of the EU-sponsored Trade Liberalization in the MENA Countries
Andrzej Cieślik and 
Jan Hagemejer 
Warsaw University
National Bank of Poland Warsaw University
Copyright ©2009 Journal of Economic Integration
ABSTRACT

The EU-sponsored Barcelona conference in 1995 set the ambitious goal of creating the Euro-Mediterranean Free Trade Area (EUROMED) that would include the European Union and the MENA countries by 2010. The intermediate steps towards building the EUROMED have involved bilateral "vertical" trade liberalization between the EU and the particular MENA countries as well as "horizontal" trade liberalization among themselves. In this paper we evaluate empirically the effects of the new EU Association Agreements with the MENA countries using the augmented gravity equations derived from a variety of neoclassical and new trade theory models and panel data for the period 1980-2004. We find that while these agreements increased significantly imports of the MENA countries from the EU they had no positive impact on their exports to the EU which can be attributed to the asymmetry in trade liberalization between the EU and the MENA countries.

JEL Classification: F11, F12

Keywords: bilateral trade | gravity equation | preferential trade liberalization
 
REFERENCE
1. Al-Atrash, H. and Yousef, T. (2000), "Intra-Arab Trade: Is It too Little?", IMF Working Paper No. 2000/10.
2. Augier, P. and Gasiorek, M. (2003), "The Welfare Implications of Trade Liberalization between the Southern Mediterranean and the EU", Applied Economics, 35, pp. 1171-1190.
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