Deeper Integration or Wider Integration?: the case of Gulf Cooperation Council

Houcine Boughanmi (), Ahmed Al-Shammakhi () and Alessandro Antimiani ()
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Houcine Boughanmi: Sultan Qaboos University, Postal: Houcine Boughanmi; Po Box 34 CAMS, Department of Natural Resource Economics, Sultan Qaboos University, Al-Khod 123, Oman
Ahmed Al-Shammakhi: Sultan Qaboos University, Postal: Po Box 34 CAMS, Department of Natural Resource Economics, Sultan Qaboos University, Al-Khod 123, Oman
Alessandro Antimiani: European Commission, Postal: European Commission - DG TRADE, Chief Economist and Trade Analysis Unit (G-2), Office CHAR 5/38, Rue de la Loi, 170 B-1049 Brussels, Belgium

Journal of Economic Integration, 2016, vol. 31, issue 2, 206-233

Abstract: We empirically evaluate whether fostering trade partnership within the region is a better economic course of action for the Gulf Cooperation Council than engaging into preferential trade arrangements with well-established trade blocs outside the region. We use the 8.1 version of Global Trade Analysis Project to analyze four scenarios representing various Gulf Cooperation Council trade integration paths, taking into consideration the issue of non-Tariff Barriers and trade facilitation measures. Results indicate that the Gulf Cooperation Council gain from lifting tariffs and non-tariff barriers on trade with the Greater Arab Free Trade Area subgroups and with the European Union is limited unless such barrier lifting is complemented with trade facilitation measures. With trade facilitation, the full completion of Greater Arab Free Trade Area scenario yields the highest welfare gain for the Gulf Cooperation Council, while the Gulf Cooperation Council-European Union Free Trade Agreement scenario yields positive but smaller gain. The small gain with Gulf Cooperation Council-European Union scenario is explained by the negative terms of trade effects following trade liberalization. These results underscore the importance of deepening Greater Arab Free Trade Area’s scope through introduction of trade facilitation measures as well as measures beyond merchandize trade liberalization.

Keywords: Computable General Equilibrium; Global Trade Analysis Project; Gulf Cooperation Council; Regional integration; MENA (search for similar items in EconPapers)
JEL-codes: F10 F15 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:ris:integr:0684

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