North African Countries and Agricultural Trade Liberalization Under the Doha Round: Does a Top-Down Analysis Matters?

The countries of North Africa are characterized by a relatively high contribution of agriculture sector in their economies. At the same time, all the countries in the region are net agricultural importers. In this context, any potential agreement on agricultural trade liberalization under the Doha Round multilateral negotiations will raises world agricultural prices and could adversely affect the region. Although there are numerous studies on the impact of multilateral agricultural trade liberalization on North African countries, few studies have examined the impact of these global changes on the agricultural sector and on income distribution. Moreover, all the past studies use either global or country CGE models. This study attempts to address this gap in the literature. First, it combines the advantages of global and country models by linking the MIRAGE model to two countries dynamic CGE models built specially for this study. Second, we examine the distributional impact of agricultural trade liberalization in the two countries by integrating individually various household categories in both models. Our results show that drawing policy implications from global models for a specific country is completely misleading. In fact, while the results of the global model show that Tunisia will be winner and Morocco a loser from agricultural trade liberalization, the country models show a completely different picture. For both countries, results show that while the macroeconomic effects are relatively modest, all categories of households lose

Does regionalism affect trade liberalization toward non-members?

We examine the effect of regionalism on unilateral trade liberalization using industry-level data on applied most-favored nation (MFN) tariffs and bilateral preferences for ten Latin American countries from 1990 to 2001. We find that preferential tariff reduction in a given sector leads to a reduction in the external (MFN) tariff in that sector. External liberalization is greater if preferences are granted to important suppliers. However, these “complementarity effects” of preferential liberalization on external liberalization do not arise in customs unions. Overall, our results suggest that concerns about a negative effect of preferential liberalization on external trade liberalization are unfounded