Assessment of the Impact of the Economic Partnership Agreement between the COMESA countries and the European Union

The purpose of this study, is to evaluate possible economic repercussions of the trade facet, in Economic Partnership Agreements (EPAs), currently being negotiated between countries of the Common Market in Eastern and Southern Africa (COMESA) and Member-States of European Union (EU). In so-doing, we have used two complementary models, the first one, based-on a general equilibrium approach, and the second, a partial equilibrium method. Indeed, multilateral trade agreements, will have implications trade activities, on the production of goods and factors, the price of consumer-goods, on the are of specialization of national economies, and their productive structure. Existing trade policy instruments also, will have direct and indirect effects on the market value of goods produced locally, or imported onto the markets of the COMESA sub-region.EPA-European Union-COMESA

The Cost of non-Maghreb: Achieving the Gains from Economic Integration

The purpose of this paper is to estimate the impact of the integration of Maghreb countries into a free trade area on the main macroeconomic aggregates. By using the MIRAGE model and MacMap database, we tested different scenarios to estimate the gains or the potential losses of various plans of trade integration (Free trade area for the Maghreb countries, Custom Union between Maghreb countries, Maghreban Common Market). Our study suggests that the overall gains from liberalizing trade in goods (and removing various regulatory non-tariff barriers in the process) could reach at least USD 350 million. The increase in revenue through increases in production and wages would positively affect welfare levels for Maghreb consumers. The dynamic gains from liberalizing trade in goods can outstrip the static gains, with productivity improvements as the main driver. Our analysis shows that the creation of a common market is probably the most interesting and efficient option for the Maghreb countries.Free Trade Area, Maghreb, and CGE Model

Can Market Access Help African Agriculture?

This paper examines the implications for African economies of the possible outcomes from the ongoing agriculture negotiations in the Doha Round. The paper defines scenarios that capture key elements of the modalities negotiations and undertakes simulations using a global dynamic general equilibrium model to examine the impact of multilateral agricultural trade reforms on African economies. The scenarios vary in their level of ambition in the market access pillar through both the level of tariff cuts in the different tiers and the level of sensitive sectors defined both for developed and developing economies. Results show that ambitious coefficients in the market access pillar remain the best outcome for Africa. Even what might seem to be an insignificant definition of sensitive products for developed countries erodes potential benefits from deep tariff cuts for African countries. This suggests that utilizing sensitive products tariff lines by developed countries not only dampens the expected positive outcomes for agriculture negotiations in favour of Africa but could also actually wipe out such gains. The results further confirm findings of other studies showing that tariff cuts for agricultural goods yield higher gains than elimination of subsidies, and this applies mainly to net food importing developing countries. Thus, reduction of subsidies should go hand-in-hand with agricultural tariff reductions in order to ensure win-win outcomes.Agriculture in International Trade, Welfare Economics, Computable General Equilibrium, Models, Africa

Assessment of the impact of the Economic Partnership Agreement between the ECOWAS countries and the European Union

The present study consists of eight sections. After the introduction, we present in the first section, the profile of the ACP-EU cooperation agreements from Lomé to Cotonou. We also show how a certain “grey areas” in the WTO rules on regional agreements can enable African countries to benefit more from the EPAs by taking advantage of greater flexibility. The next section presents some graphical data on Africa’s trade flows in general and on trade flows of ECOWAS in particular. The third section deals with the analytical framework in general equilibrium. It contains a presentation of the Global Trade Analysis Project (GTAP) model used for assessing the impact of different partnership agreement options. In the fourth section, we focus on the characteristics of African economies, which are drawn from the GTAP database and which play a key role in the operative interactions in this kind of liberalization. The fifth section deals with the analytical framework in partial equilibrium which is complementary to the general-equilibrium modelling. The assessments of the economic impacts of the EPAs for Africa, using the general-equilibrium model, are analysed in the sixth section, while those particularly concerning the ECOWAS countries, using the partial-equilibrium framework, are presented in the penultimate section. Finally, the last section comprises concluding remarks.EPA-European Union-Africa-Trade Policy

Assessing the Consequences of the Economic Partnership Agreement on the Ethiopian Economy

The results presented indicate that a free trade area would reinforce the linkages between Ethiopia and European countries, including traditional partners such as Italy, with implications for the regional integration arrangements that Ethiopia is currently involved in. There will be significant trade diversion away from other African countries currently trading with Ethiopia. The diversion will occur in the lowtechnology sectors, which are potentially good foundations for deepened regional integration based on trade in industrial goods. The results further indicate some important implications with respect to Ethiopia’s industrialization strategy. The liberalization of industrial sectors result in more trade effects, particularly negative trade diversion, compared to the results from agricultural liberalization. The loss in revenue, which is a strong feature in general liberalization, is at the sectoral level, more pronounced in the industrial liberalization. The economic structure of Ethiopia, which supports self-reliance in food from the agriculture sector, underpins the limited losses in agriculture as compared to the industrial sector. Clearly, instead of opening the doors to economic diversification, the EPA could lead Ethiopia to deepen its comparative advantages in agricultural products.Ethiopia- Economic Partnership Agreement- Trade impact

North African countries (NACs) production and export structure: Towards diversification and export sophistication strategy

The North African countries (NACs) production and export structure is suffering from double constraints: insufficient diversification along with excessively weak sophistication. This study establish a deeper link between diversification/sophistication on and growth in the NACs. The study assesses the impact of these variables on the growth of these countries so as to verify whether the current export structure is indeed a constraint to the economic development. The approach used consists in estimating a growth model as a Barro's regression (conditional -convergence model) using panel data. The paper identify the factors determining diversification and sophistication of exports so as to find the various levers and actions which would firstly allow NACs to diversify their exports to higher added value products and secondly to take the existing products to a higher level of sophistication. The last part of this study proposes recommendations in terms of economic policies based on obtained results, highlighting the role of various stakeholders, and different policies

North African countries (NACs) production and export structure: Towards diversification and export sophistication strategy

The North African countries (NACs) production and export structure is suffering from double constraints: insufficient diversification along with excessively weak sophistication. This study establish a deeper link between diversification/sophistication on and growth in the NACs. The study assesses the impact of these variables on the growth of these countries so as to verify whether the current export structure is indeed a constraint to the economic development. The approach used consists in estimating a growth model as a Barro's regression (conditional -convergence model) using panel data. The paper identify the factors determining diversification and sophistication of exports so as to find the various levers and actions which would firstly allow NACs to diversify their exports to higher added value products and secondly to take the existing products to a higher level of sophistication. The last part of this study proposes recommendations in terms of economic policies based on obtained results, highlighting the role of various stakeholders, and different policies

Economic and Welfare Impacts of the EU-Africa Economic Partnership Agreements

Th is study examines the economic and social impacts of the trade liberalization aspects of the proposed Economic Partnership Agreements (EPAs) between the European Union (EU) and African countries. It provides a quantitative assessment of the likely implications of EPAs establishing Free Trade Areas (FTAs) between the EU and the various African Regional Economic Communities (RECs). Th e focus of the empirical analysis is on the trade liberalization component of the EPAs. In particular, the following questions are addressed. First, how will an EPA that includes reciprocal market access agreements between the EU and Africa impact on African countries’ GDPs, levels of employment and other macroeconomic aggregates? Second, what sectors in Africa are most likely to lose and what sectors gain with EPAs? Th ird, what are the welfare implications for African countries from the EPAs? Fourth, how will the formation of EPAs aff ect trade expansion through trade creation and trade diversion eff ects? Fifth, what are the potential fi scal implications of the EPAs? Th e main conclusions drawn from the results and the discussions are that full reciprocity will be very costly for Africa irrespective of how the issue is looked at. A focus on deepening integration with a view to enhancing intra-African trade would provide positive results. But it is the scenario that off ers unrestricted market access for Africa, which deals eff ectively with barriers associated with sensitive European products, that portends the largest gain for the continent. Even with reciprocity, a free trade area that includes sectors of export interest to Africa and one that deals with non-tariff barriers promises positive results for African countries.EPA- Africa- Europe

The Cost of non-Maghreb: Achieving the Gains from Economic Integration

The purpose of this paper is to estimate the impact of the integration of Maghreb countries into a free trade area on the main macroeconomic aggregates. By using the MIRAGE model and MacMap database, we tested different scenarios to estimate the gains or the potential losses of various plans of trade integration (Free trade area for the Maghreb countries, Custom Union between Maghreb countries, Maghreban Common Market). Our study suggests that the overall gains from liberalizing trade in goods (and removing various regulatory non-tariff barriers in the process) could reach at least USD 350 million. The increase in revenue through increases in production and wages would positively affect welfare levels for Maghreb consumers. The dynamic gains from liberalizing trade in goods can outstrip the static gains, with productivity improvements as the main driver. Our analysis shows that the creation of a common market is probably the most interesting and efficient option for the Maghreb countries

Assessment of the impact of the Economic Partnership Agreement between the ECOWAS countries and the European Union

The present study consists of eight sections. After the introduction, we present in the first section, the profile of the ACP-EU cooperation agreements from Lomé to Cotonou. We also show how a certain “grey areas” in the WTO rules on regional agreements can enable African countries to benefit more from the EPAs by taking advantage of greater flexibility. The next section presents some graphical data on Africa’s trade flows in general and on trade flows of ECOWAS in particular. The third section deals with the analytical framework in general equilibrium. It contains a presentation of the Global Trade Analysis Project (GTAP) model used for assessing the impact of different partnership agreement options. In the fourth section, we focus on the characteristics of African economies, which are drawn from the GTAP database and which play a key role in the operative interactions in this kind of liberalization. The fifth section deals with the analytical framework in partial equilibrium which is complementary to the general-equilibrium modelling. The assessments of the economic impacts of the EPAs for Africa, using the general-equilibrium model, are analysed in the sixth section, while those particularly concerning the ECOWAS countries, using the partial-equilibrium framework, are presented in the penultimate section. Finally, the last section comprises concluding remarks