Middle East and North Africa countries’ agricultural export potentials under trade reforms

Abstract

Middle East and North Africa (MENA) countries' future stand in the world's economy depends to a large extent on the potentials of their agriculture to perform in a free trade world. European Union (EU) is the largest market for agricultural products of MENA countries, though new outlets and new partnerships can expand the market of their products. Enhancing agriculture's potentials safeguards the economy's general expansion and impede the flee of MENA countries’ huge labour reserves to the developed world. In this work, introducing a few possible trade reforms, a general equilibrium model is employed to assess the impacts upon region's export potentials and welfare changes. Selecting certain distinct scenarios from a wide spectrum of anticipated trade reforms, and feeding them into the model, insights on the direction of the expected changes and rough estimates of accrued benefits can be extracted. The model results suggest that the region might benefit the most under special provisions for developing countries in a World Trade Organization (WTO) agreement, while in the case of EU-Med agreement, agricultural trade will benefit MENA countries and can induce economic growth through the expansion of agricultural exports.

Notes

¹ Turkey, Morocco, Algeria, Tunisia, Egypt, Lebanon, Libya, Syria, Israel, Gaza Strip and West Bank, and Jordan.

² The Average Agriculture's share for MENA countries in the Gross Domestic Product (GDP) and exports exceeds the 10%.

³ The so-called Barcelona Agreement is implemented through Association Agreements with each one of the Mediterranean Partner Countries, and the aim of this agreement is the formation of a Free Trade Area after 2010.

⁴ This model is documented in Diao et al. (2002) and a short description is provided in the Appendix.