Work

The impact of FTAs on MENA trade in agricultural and industrial products

Year: 2016

Type: article

Abstract: This article analyses the impact of Free Trade Agreements (FTAs) on Middle East and North African Countries (MENA) trade for the period 1994–2010. The analysis distinguishes between industrial and agricultural trade to take into account the different liberalization schedules. An augmented gravity model is estimated using up-to-date panel data techniques to control for all time-invariant bilateral factors that influence bilateral trade as well as for the so-called multilateral resistance factors. We also control for the endogeneity of the agreements and test for self-selection bias due to the presence of zero trade in our sample. The main findings indicate that North–South-FTAs and South–South-FTAs have a differential impact in terms of increasing trade in MENA countries, with the former being more beneficial in terms of exports for MENA countries, but both showing greater global market integration. We also find that FTAs that include agricultural products, in which MENA countries have a clear comparative advantage, have more favourable effects for these countries than those only including industrial products.

Source: Applied Economics

DOI: 10.1080/00036846.2015.1119792

Authors: M. D. Parra, I. Martinez-Zarzoso, C. Suárez-Burguet

Institutions: Universitat Jaume I, Universitat Rovira i Virgili, Ibero-American Institute

Language: English

Topic: Global trade and economics

Subfield: General Economics, Econometrics and Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDGs: Decent work and economic growth, Zero hunger

Open Access status: green

Funder: Universitat Jaume I