The Partial and General Equilibrium Effects of the Greater Arab Free Trade Agreement

Zouheir El-Sahli

MPRA Paper from University Library of Munich, Germany

Abstract: Regional trade agreements among developing countries are understudied in the literature. The Greater-Arab Free Trade Agreement (GAFTA) is one such agreement among the Arab countries. The few existing studies on GAFTA suffer from many shortcomings that we address in this study. We incorporate the latest advances in the literature to investigate the partial and general equilibrium effects of GAFTA. The partial equilibrium estimates suggest that GAFTA had a positive and significant effect on bilateral trade of around 40% in 1998 and 61% seven years later after the phasing out of tariffs. The general equilibrium analysis suggests that the welfare effects of the agreement are very small and mostly negligible in the member states. The results highlight that deeper integration among the Arab countries is imperative to bring about further welfare benefits to the member states. This result can be generalized to recommend deeper regional trade agreements among developing countries to capitalize on the benefits of free trade.

Keywords: free trade agreements; Greater-Arab Free Trade Agreement; economic integration; international trade; gravity model; general equilibrium (search for similar items in EconPapers)
JEL-codes: F1 O1 O2 (search for similar items in EconPapers)
Date: 2021-02
New Economics Papers: this item is included in nep-ara and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/104354/1/MPRA_paper_104354.pdf original version (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:104354

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter (winter@lmu.de).