Towards an Explicit Modeling of Trade Facilitation in CGE Models: Evidence from Egypt

This paper develops a dynamic computable general equilibrium (CGE) model incorporating Trade Facilitation aspects in Egypt. This paper’s contributions are twofold: theoretical and empirical ones. First, this paper estimates ad valorem tariff equivalents for time of imports and documents for exports which are then introduced in a CGE model. Thus, the second contribution of the paper is the direct modeling of such barriers in a dynamic CGE model applied on the Egyptian economy. I modify the Exter model in order to take into account Trade Facilitation facets in an explicit way. The model is calibrated on the Egyptian social accounting matrix of 2000/2001. My main findings show that, when Trade Facilitation is simulated precisely, i.e. by taking into account its cost as well as the tariff equivalents of its aspects, the impact of such a process is reduced. Meanwhile, its impact remains higher than trade liberalization. Moreover, some sectors witness a significant expansion more than others, especially processed food, garments and textiles.