Beyond Border Barriers: The Liberalisation of Services Trade in Tunisia and Egypt

19 Pages Posted: 9 Oct 2004

See all articles by Denise Eby Konan

Denise Eby Konan

University of Hawaii at Manoa

Karl E. Kim

University of Hawaii at Manoa

Abstract

Tunisia and Egypt have both recently undertaken significant steps toward trade reform. They have committed to a partnership agreement with the European Union. Both countries have also joined the WTO and are participating in Doha Round discussions on the liberalisation of non-tariff barriers on both goods and services trade. These developments provide an interesting context within which to investigate not only the changes in welfare associated with reforms affecting the trade in goods, but also the impacts of services liberalisation. Using open-economy computable general equilibrium models for both Tunisia and Egypt, this paper explores the reasons why structural differences in these two economies imply different opportunities and challenges with trade reform and services liberalisation. The gains from eliminating barriers at the border for goods trade are significantly greater for Tunisia than Egypt. Both countries, however, gain substantially from liberalisation of foreign direct investment in services. Furthermore, economic growth is more evenly distributed across sectors than with liberalisation of trade in goods alone. In addition to reporting on the impact of alternative policies on income, output, employment and trade, sector-level effects are also considered.

Suggested Citation

Konan, Denise Eby and Kim, Karl E., Beyond Border Barriers: The Liberalisation of Services Trade in Tunisia and Egypt. The World Economy, Vol. 27, No. 9, pp. 1429-1447, September 2004. Available at SSRN: https://ssrn.com/abstract=602678

Denise Eby Konan (Contact Author)

University of Hawaii at Manoa ( email )

Honolulu, HI 96822
United States

Karl E. Kim

University of Hawaii at Manoa

Honolulu, HI 96822
United States

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