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Deeper Integration or Open Regionalism in the Indian Ocean Rim Association (IORA): A CGE Approach

Author

Listed:
  • Akintola, Abdallah

    (Sultan Qaboos University, Sultanate of Oman)

  • Boughanmi, Houcine

    (Sultan Qaboos University, Sultanate of Oman)

  • Antimiani, Alessandro

    (European Commission, Belgium)

  • Zaibet, Lokman

    (Sultan Qaboos University, Sultanate of Oman)

  • Kotagama, Hemesiri

    (Sultan Qaboos University, Sultanate of Oman)

Abstract

The Indian Ocean Rim Association (IORA) is a regional association based on the principle of open regionalism to promote liberalization through trade and investment facilitation. This study compares two main scenarios with the ingredients of a deeper regional integration compared to the IORA's present open regionalism status. Scenario I evaluates the effects of gradual tariff cuts on IORA, while Scenario II combines the impact of tariff cuts, non-tariff measures (NTM) reduction, and trade facilitation. A recent recursive dynamic model, called Global Trade Analysis Project recursive dynamic model (GTAP-RD), was used to understand the adjustment path. The result shows welfare gain for a ll IORA countries when a t rade liberalization involving tariff cuts is complemented with NTM reduction and trade facilitation. In addition, the "NTM spillover" effect on some non-IORA members (the rest of Gulf Cooperation Council, the rest of Greater Arab Free Trade Agreement, and the United Kingdom) was observed. The results suggest that IORA has more to gain if it involves a deeper regional integration than the present form of open regionalism.

Suggested Citation

  • Akintola, Abdallah & Boughanmi, Houcine & Antimiani, Alessandro & Zaibet, Lokman & Kotagama, Hemesiri, 2022. "Deeper Integration or Open Regionalism in the Indian Ocean Rim Association (IORA): A CGE Approach," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 37(4), pages 705-733.
    • Handle: RePEc:ris:integr:0863
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    Keywords

    integration; Indian Ocean Rim Association; non-tariff measures; trade facilitation; dynamic model;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration

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