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Deep Integration, Non-Discrimination and Euro-Mediterranean Free Trade

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  • Hoekman, Bernard
  • Konan, Denise

Abstract

Key questions in evaluating the justification for free trade agreements (FTAs) are whether formal international cooperation is necessary to promote greater contestability of markets through harmonization or recognition of regulatory regimes ("deep integration"), and whether any actions taken to reduce market segmentation are applied on a nondiscriminatory basis. This paper investigates the potential importance of deep integration in the context of trade agreements the EU has concluded with Mediterranean countries. Using a standard competitive general equilibrium model of the Egyptian economy, we find that the static welfare impact of a deep FTA is a multiple of what can be obtained from a classic "shallow" agreement; in some scenarios welfare may increase by more than 10 percent of GDP, compared to close to zero under a shallow agreement.

Suggested Citation

  • Hoekman, Bernard & Konan, Denise, 1999. "Deep Integration, Non-Discrimination and Euro-Mediterranean Free Trade," CEPR Discussion Papers 2095, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:2095
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    Cited by:

    1. repec:bla:jcmkts:v:44:y:2006:i::p:507-532 is not listed on IDEAS
    2. Joseph Francois & Bernard Hoekman, 2010. "Services Trade and Policy," Journal of Economic Literature, American Economic Association, vol. 48(3), pages 642-692, September.
    3. Dunning John H. & Lundan Sarianna M. & Eckes Alfred E. & Bryant Sarah K. & Unger Michael L. & Shelburne Robert C. & Cernat Lucian, 2001. "Global Economy Quarterly, Issue 3," Global Economy Journal, De Gruyter, vol. 2(3), pages 109-109, December.
    4. Francois, Joseph F. & McQueen, Matthew & Wignaraja, Ganeshan, 2005. "European Union-developing country FTAs: overview and analysis," World Development, Elsevier, vol. 33(10), pages 1545-1565, October.
    5. Lucian Cernat, 2001. "ASSESSING REGIONAL TRADE ARRANGEMENTS: ARE SOUTH–SOUTH RTAs MORE TRADE DIVERTING?," International Trade 0109001, University Library of Munich, Germany.
    6. Konan, Denise Eby & Maskus, Keith E., 2000. "Joint trade liberalization and tax reform in a small open economy: the case of Egypt," Journal of Development Economics, Elsevier, vol. 61(2), pages 365-392, April.
    7. Mattoo, Aaditya, 2006. "Services, Economic Development and the Doha Round: Exploiting the Comparative Advantage of the WTO," CEPR Discussion Papers 5628, C.E.P.R. Discussion Papers.
    8. Daniel Müller-Jentsch, 2005. "Deeper Integration and Trade in Services in the Euro-Mediterranean Region : Southern Dimensions of the European Neighborhood Policy," World Bank Publications - Books, The World Bank Group, number 7335.
    9. Zaki, Chahir, 2009. "Towards an Explicit Modeling of Trade Facilitation in CGE Models: Evidence from Egypt," Conference papers 331897, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    10. Christen, Elisabeth & Francois, Joseph & Hoekman, Bernard, 2012. "CGE modeling of market access in services," Policy Research Working Paper Series 6106, The World Bank.
    11. Sami Bensassi & Laura Márquez-Ramos & Inmaculada Martínez-Zarzoso, 2012. "Economic Integration and the Two Margins of Trade: The Impact of the Barcelona Process on North African Countries' Exports," Journal of African Economies, Centre for the Study of African Economies, vol. 21(2), pages 228-265, March.
    12. Franco Zallio, 2000. "Deep Integration, EURO-MED Free Trade and the WTO 2000 Negotiations," Working Papers 2014, Economic Research Forum, revised 05 Nov 2000.
    13. Denise Eby Konan & Keith E Maskus, 2000. "Bilateral Trade Patterns and Welfare: An Egypt-EU Preferential Trade Agreement," Working Papers 200001, University of Hawaii at Manoa, Department of Economics.
    14. Cao, Liangyue, 2010. "Solving Inequality Constrained Problems using GEMPACK," Conference papers 331932, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    15. Harb George, 2010. "Communication Infrastructures, Institutional Efficiency and EU-Arab Trade: Assessment and Implications," Review of Middle East Economics and Finance, De Gruyter, vol. 6(2), pages 49-73, November.
    16. repec:bla:jcmkts:v:45:y:2007:i::p:1011-1040 is not listed on IDEAS
    17. Ram Upendra Das, 2009. "Regional Economic Integration in South Asia : Prospects and Challenges," Macroeconomics Working Papers 22987, East Asian Bureau of Economic Research.
    18. Jose R. Lopez-Calix & Peter Walkenhorst & Ndiame Diop, 2010. "Trade Competitiveness of the Middle East and North Africa : Policies for Export Diversification," World Bank Publications - Books, The World Bank Group, number 2466.
    19. Alessandrini, Sergio & Resmini, Laura, 2000. "FDI in the Mediterranean Region: a Comparison with CEE Experience," MPRA Paper 26103, University Library of Munich, Germany.

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    More about this item

    Keywords

    Arab league; deep integration; Egypt; Non-Tariff Barriers; preferential trade agreements; Trade in Services;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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