Economic and Social Impacts of the Prospective EU-ECOWAS Economic Partnership Agreements: The Evidence from Cote d'Ivoire

Youssouf Kone

No 331777, Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project

Abstract: The Economic Community of West African states (ECOWAS) is currently engaged in negotiations with the European Union over the successor agreement to the Lome IV Convention which grants non-reciprocal preferential access to the European market for exports of African Caribbean and Pacific countries. The main objective of the new Economic partnership agreement (EPA) is the ‘‘eradication of poverty in a consistent manner with the objectives of sustainable development and the gradual integration of the ACP countries in the world economy’’. Preliminary discussions have suggested the establishment of a Free Trade Area (FTA) between ECOWAS and European Union in accordance with the relevant WTO rules, eliminating tariff and non-tariff barriers progressively and help further integration among West African countries. The new regime adopted under the Cotonou Agreement also addresses the issue of trade related aid in particular to compensate fiscal revenue loss and address supply-side constraints. In this paper, we use the standard Global Trade Analysis Project (GTAP) model to assess the prospective economic and social effects of the proposed EU-ECOWAS EPAs in Cote d’Ivoire. These impacts along with proposed average tariff reductions are utilized to forecast the potential revenue gain or loss resulting from the establishment of an EPA. The preliminary simulation results show that full reciprocity will be costly for Cote d’Ivoire in terms of revenue losses, adjustments costs associated with de-industrialisation. However, unrestricted market access for Cote d’Ivoire into the EU-25, taking into account the issue of fiscal compensations promise positive gains. In addition it will result in welfare gains.

Keywords: International Relations/Trade; Research Methods/Statistical Methods (search for similar items in EconPapers)
Pages: 30
Date: 2008
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