Optimal Regional Trade-Integration Schemes in North Africa </br>: Toward a Pro-Industrialization Policy

Mevel, Simon; Moll de Alba, Jaime; Oulmane, Nassim

doi:2016.31.3.569

The Journal of Economic Integration 2016 September;31(3) :569-608.
DOI: https://doi.org/10.11130/jei.2016.31.3.569

Optimal Regional Trade-Integration Schemes in North Africa
: Toward a Pro-Industrialization Policy

Simon Mevel, Jaime Moll de Alba, Nassim Oulmane,

United Nations Economic Commission for Africa, Addis Ababa, Ethiopia
United Nations Industrial Development Organization, Vienna, Austria

Corresponding Author: Nassim Oulmane ,Tel: +251 115443089, Email: oulmane@uneca.org

ABSTRACT

This article examines the status of industrial production in North African Countries as well as the role that regional trade integration through free-trade agreements and trade facilitation may play in spurring this region’s reindustrialization. The study uses Applied General Equilibrium model to assess the potential impact of the establishment of a Continental Free Trade Area as well as the reduction of costs to trade across borders. This article also measures the additional impact of the implementation of the Great Arab Free Trade Area and, finally, a deeper free trade agreement among North African countries and the European Union. The main findings indicate that each free-trade agreement configuration will stimulate, in relative terms, North African countries’ exports from a number of main industries. Whereas industrial products represent the largest share of North African countries’ export gains to Africa in general, mining and energy dominate North African countries’ export gains to the rest of the Arab League and food dominates the exports to the European Union. Therefore, the establishment of the Continental Free Trade Area, accompanied by trade-facilitation measures, appears to be crucial in providing support for North African countries’ industrialization.

JEL Classification

F14: Empirical Studies of Trade
F15: Economic Integration
F63: Economic Development
O14: Industrialization; Manufacturing and Service Industries; Choice of Technology
O19: International Linkages to Development; Role of International Organizations

Keywords: Regional Trade Agreements | Industrialization | Trade Facilitation