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A CGE Assessment of FTA Between Tunisia and the EU Under Oligopolistic Market Structures

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  • Chatti Rim

    (ESSEC; URECA)

Abstract

In this paper, the impact of removing all Tunisian tariffs on imports from the EU, while maintaining protection on imports from the rest of the world, is evaluated using computable general equilibrium (CGE) models. Both competitive and Cournot oligopolistic commodities market structures with and without barriers to entry and exit are considered. It is found that a free trade agreement (FTA) improves welfare in all cases, with maximum gains under oligopoly and free entry and exit. At the sectoral level, the FTA benefits different industries at the expense of agriculture and services, which are relatively intensive in primary factors of production.

Suggested Citation

  • Chatti Rim, 2003. "A CGE Assessment of FTA Between Tunisia and the EU Under Oligopolistic Market Structures," Review of Middle East Economics and Finance, De Gruyter, vol. 1(2), pages 1-30, August.
    • Handle: RePEc:bpj:rmeecf:v:1:y:2003:i:2:n:1
    DOI: 10.2202/1475-3693.1006
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    References listed on IDEAS

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    1. repec:bla:rdevec:v:1:y:1997:i:3:p:275-93 is not listed on IDEAS
    2. Rim Chatti, 2000. "General Equilibrium Assessment of Trade Liberalization Effects under Cournot Oligopoly Market Structures: The Case of Tunisia," Working Papers 2009, Economic Research Forum, revised 03 2000.
    3. Thomas F. Rutherford & E. Elisabet Rutstrom & David Tarr, 2014. "Morocco's free trade agreement with the EU: A quantitative assessment," World Scientific Book Chapters, in: APPLIED TRADE POLICY MODELING IN 16 COUNTRIES Insights and Impacts from World Bank CGE Based Projects, chapter 17, pages 405-437, World Scientific Publishing Co. Pte. Ltd..
    4. Keith E. Maskus & Denise Eby Konan, 1997. "Trade Liberalization in Egypt," Review of Development Economics, Wiley Blackwell, vol. 1(3), pages 275-293, October.
    5. Dani Rodrik, 1988. "Imperfect Competition, Scale Economies, and Trade Policy in Developing Countries," NBER Chapters, in: Trade Policy Issues and Empirical Analysis, pages 109-144, National Bureau of Economic Research, Inc.
    6. Robert E. Baldwin, 1988. "Trade Policy Issues and Empirical Analysis," NBER Books, National Bureau of Economic Research, Inc, number bald88-2.
    7. Harris, Richard, 1984. "Applied General Equilibrium Analysis of Small Open Economies with Scale Economies and Imperfect Competition," American Economic Review, American Economic Association, vol. 74(5), pages 1016-1032, December.
    8. Jaime De Melo & Arvind Panagariya & Dani Rodrik, 2015. "The New Regionalism: A Country Perspective," World Scientific Book Chapters, in: Developing Countries in the World Economy, chapter 14, pages 323-357, World Scientific Publishing Co. Pte. Ltd..
    9. Mohamed Chemingui & Sébastien Dessus, 1999. "La libéralisation de l'agriculture tunisienne et l'Union européenne : Une vue prospective," OECD Development Centre Working Papers 144, OECD Publishing.
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    Cited by:

    1. Lucke, Bernd & Zotti, Jacopo, 2016. "Macroeconomic effects of the Barcelona Initiative," Journal of Policy Modeling, Elsevier, vol. 38(5), pages 837-854.
    2. Kavallari, Aikaterini & Schmitz, P. Michael, 2008. "Multilateral trade liberalisation and Preference erosion: Effects on the agricultural sector of the EU's Mediterranean Partner Countries," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 44177, European Association of Agricultural Economists.
    3. Kavallari, Aikaterini & Schmitz, P. M., 2012. "Preference erosion effects on the agricultural sector of the EU’s Mediterranean Partner Countries," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 11(2), pages 1-15.
    4. Kavallari, Aikaterini & Schmitz, P. Michael, 2010. "Preference erosion effects on the agricultural sector of the EU’s Mediterranean Partner Countries," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 11(2), pages 1-15, August.
    5. Dessus Sebastien & Ghaleb Joey R, 2008. "Trade and Competition Policies for Growth in Lebanon: A General Equilibrium Analysis," Review of Middle East Economics and Finance, De Gruyter, vol. 4(1), pages 59-80, January.

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    Keywords

    CGE models; FTA; IRTS; oligopoly; Tunisia;
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