A CGE Assessment of FTA between Tunisia and the EU Under Oligopolistic Market Structures
Review of Middle East Economics and Finance, Vol. 1, No. 2, August 2003
Posted: 23 Nov 2005
Abstract
In this paper the impact of removing all Tunisian tariffs on imports from EU, while maintaining protection on imports from the rest of the world, is evaluated using computable general equilibrium (CGE) models. Either competitive or Cournot oligopolistic commodities market structures with and without barriers to entry and exit are considered. It is found that FTA improves welfare in all cases, and these gains are the most important with oligopoly and free entry and exit. At the sectoral level, the FTA benefits to the different industries at the expanse of agriculture and services, which are relatively intensive in primary factors of production.
Keywords: CGE models, FTA, IRTS, oligopoly, Tunisia
JEL Classification: C68, D43, D58, F12
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