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Impacts of the Euro-Tunisian Agreements of Free Exchange: Evaluation by a Computable General Equilibrium Model in 1996

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  • Hadj Salem, Haykel

Abstract

Until nowadays, the South-Mediterranean countries have focused on their strategic choice which consists in the creation of a Euro-Mediterranean Free Trade Area (FTA). In the context of globalisation, this choice appears to be the best means which facilitates the integration of the south countries with the north countries of the Mediterranean. This FTA is going to be established progressively during a period of transition of 12 years. Among the first participants in the constitution of this zone, is Tunisia, which signed an agreement of association with the European Union (EU). This agreement is based on free exchange and on financial, economic and technical cooperation and it contains a social and cultural chapter and a political dialogue. Since the signature of this agreement, Tunisia has been interested in improving its internal economic situation through internal reforms (plan of structural adaptation, upgrading, fiscal reform …) to facilitate the application of external reforms. With the coming into force of this agreement, the free Euro-Tunisian exchange concerns exclusively industrial products, while the other products (farm produce) are going to be examined in the coming days. The object of this communication is to compare the effects of the free total exchange and the effects of the free industrial exchange between Tunisia and the EU in the Tunisian economy. This problem was estimated by means of a Computable General Equilibrium Model (CGEM). This document will be divided in two blocks of simulations. The first concerns total commercial liberalization (for all the products (agricultural and industrial) and all services (traders and non-traders) and for all the partners), while the second block consists in a partial commercial liberalization (only for manufactured goods, for all the partners). Each of these two blocks is subdivided into four simulations: 1°) A decline of 1/12 of the rate of import customs duty 2°) A decline of 1/6 of the rate of import customs duty 3°) A decline of 50% of the rate of import customs duty 4°) A total abolition of the rate of import customs duty In these two blocks, the EU constitutes the totality of the account of the Rest of the World, because it is considered as the main partner of Tunisia. In the light of the comparison of these eight simulations, we notice that a progressive commercial liberalization applied during a reasonable period remains an effective economic reform for a developing country. Moreover, such a liberalization is considered as preferable when it is applied to one or to a certain category of product. In other words, free progressive industrial exchange between Tunisia and the EU is considered as a good strategy for the constitution of a Euro-Mediterranean FTA by 2010.

Suggested Citation

  • Hadj Salem, Haykel, 2004. "Impacts of the Euro-Tunisian Agreements of Free Exchange: Evaluation by a Computable General Equilibrium Model in 1996," Conference papers 331174, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    • Handle: RePEc:ags:pugtwp:331174
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    References listed on IDEAS

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