Effects of openness in services sectors on Tunisian economy under the DCFTA with the EU: border liberalisation and investment liberalisation

Wissem Belhadj, Mohamed Adel Dhif and Abdessalem Abbassi

International Journal of Trade and Global Markets, 2021, vol. 14, issue 6, 525-547

Abstract: The objective of this paper is to assess the impact of services liberalisation on the Tunisian economy in the context of a Deep and Comprehensive Free Trade Agreement with the European Union. An intertemporal dynamic CGE model with perfect foresight is developed to compare some alternative trade policy simulations. The main findings of this study are that freeing up service sectors induces small welfare gains and entails a significant decrease in the unemployment rate; whereas, the effect on the labour demand is fairly small. Moreover, lowering NTMs in services has a positive impact on the level of imports from the European Union countries. The growth of imported services is less important when assuming further liberalisation of investment. The simulations results reveal also that the impact of services liberalisation on production and exports depends essentially on the initial level of NTMs for these services.

Keywords: openness in services sectors; border liberalisation; investment liberalisation; Tunisia; DCFTA; deep and comprehensive free trade agreement; intertemporal dynamic CGE model. (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijtrgm:v:14:y:2021:i:6:p:525-547

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