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

Maria Dolores Parra, Inmaculada Martínez-Zarzoso and Celestino Suárez-Burguet
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Celestino Suárez-Burguet: Department of Economics, Universitat Jaume I and Institute of International Economics, Universitat Jaume I

Authors registered in the RePEc Author Service: Vicente Esteve ()

No 13-05, Working Papers from Asociación Española de Economía y Finanzas Internacionales

Abstract: This paper 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 separately to take into account the different liberalisation 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. 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 both North-South-FTAs and South-South-FTAs have a similar impact in terms of increasing trade in MENA countries showing greater global market integration. We conclude that FTAs that include agricultural products, in which MENA countries have a clear comparative advantage, are more desirable for these countries than those only including industrial products.

Keywords: Free Trade Agreements; International Trade; Mediterranean integration; MENA countries; Gravity Equation; Panel Data (search for similar items in EconPapers)
JEL-codes: F10 F15 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2013-09
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Working Paper: The Impact of FTAs on MENA Trade in Industrial and Agricultural Products (2014) Downloads
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