Some Simple Analytics of the Trade and Welfare Effects of Economic Partnership Agreements

Posted: 29 Feb 2008

See all articles by Chris Milner

Chris Milner

University of Nottingham - School of Economics

Oliver Morrissey

University of Nottingham - Development Economics

Andrew McKay

University of Bath - Department of Economics; University of Nottingham - Centre for Research on Economic Development and International Trade (CREDIT)

Abstract

The Cotonou Agreement, successor to the Lomé Convention, offers African, Caribbean and Pacific (ACP) countries preferential access to EU markets by establishing economic partnership agreements (EPAs) between the EU and blocks of ACP countries that are members of regional trading arrangements. ACP countries entering such arrangements could retain preferential access to the EU market, but on a reciprocal basis. This paper presents a relatively simple method (with moderate data requirements) to measure the likely short-run welfare consequences, static effects on trade flows and tariff revenue, of such an arrangement for ACP countries. The partial equilibrium method is illustrated for the case of the East African Cooperation (Kenya, Tanzania and Uganda). The analysis suggests that the welfare effects (excluding revenue effects) from a reciprocal agreement with the EU will be small, whether positive or negative, but ACP countries will experience short-run adjustment costs, especially in the form of revenue losses.

Keywords: chronic obstructive pulmonary disease, elderly, mortality, disability, depression

Suggested Citation

Milner, Chris and Morrissey, Oliver and McKay, Andrew, Some Simple Analytics of the Trade and Welfare Effects of Economic Partnership Agreements. Journal of African Economies, Vol. 14, Issue 3, pp. 327-358, 2005. Available at SSRN: https://ssrn.com/abstract=915460

Chris Milner (Contact Author)

University of Nottingham - School of Economics ( email )

University Park
Nottingham, NG7 2RD
United Kingdom

Oliver Morrissey

University of Nottingham - Development Economics ( email )

University Park
Nottingham, NG8 1BB
United Kingdom
+44 (0)115 9515475 (Phone)
+44 (0)115 951 4159 (Fax)

Andrew McKay

University of Bath - Department of Economics ( email )

Claverton Down
Bath, BA2 7AY
United Kingdom

University of Nottingham - Centre for Research on Economic Development and International Trade (CREDIT) ( email )

School of Economics
Nottingham, NG7 2RD
United Kingdom

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