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Economic Growth in the Euro-Med Area through Trade Int · PDF file CGE model built upon the...

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  • Report EUR 26231 EN

    2 0 1 3

    Authors: Aikaterini Kavallari, Marie-Luise Rau, Martine Rutten Editors: Pierre Boulanger, Robert M'barek

    Economic Growth in the Euro-Med Area through Trade Integration: Focus on Agriculture and Food Regional impact analysis

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    European Commission

    Joint Research Centre

    Institute for Prospective Technological Studies

    Contact information

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    http://www.jrc.ec.europa.eu

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    and do not reflect the views of the European Commission.

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    JRC84800

    EUR 26231 EN

    ISBN 978-92-79-33874-8 (pdf)

    ISSN 1831-9424 (online)

    doi:10.2791/29272

    Luxembourg: Publications Office of the European Union, 2013

    © European Union, 2013

    Reproduction is authorised provided the source is acknowledged.

    Printed in Spain

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    Acknowledgments

    This report presents a general equilibrium modelling approach to simulate further trade and economic integration between the EU and respectively Egypt, Morocco and Tunisia. The analysis applies MAGNET (Modular Applied General Equilibrium Tool), a CGE model built upon the well know GTAP (Global Trade Analysis Project) model, and concentrates on the agri-food sectors. It is part of the project "After the crisis: Economic Growth in the Euro-Med Area through Trade Integration" developed at the Support to Agricultural Trade and Market Policies (AGRITRADE) Action of DG JRC-IPTS’AGRILIFE Unit. It was carried out by a network of researchers in collaboration with ENgAGE – Expert Network for Agro-Economic Modelling, and coordinated by Pierre Boulanger.

    Results have been discussed in Brussels on March 21, 2013. Workshop participants included European Commission officers Pierre Boulanger (DG JRC-IPTS), Hasan Dudu (DG JRC-IPTS), Jacques Delincé (DG JRC-IPTS), Csilla Lakatos (DG TRADE), Robert M'Barek (DG JRC-IPTS), Stephan Nolte (DG TRADE), Dominik Olewinski (DG AGRI); project partners Mohamed Ben Abdallah (University of Tunis El Manar), Erol Cakmak (TED University Ankara), Manuel Alejandro Cardenete (former DG JRC-IPTS, now Loyola University Andalusia), Aikaterini Kavallari (LEI, part of Wageningen University), Abdelkader Ait El Mekki (National School of Agriculture Meknes), Marie-Louise Rau (LEI, part of Wageningen University), Martine Rutten (LEI, part of Wageningen University), Gamal Siam (Faculty of Agriculture at Cairo University); guest speakers El Mamoun Amrouk (FAO), Iride Ceccacci (EBRD), Claire Delpeuch (OECD), Vincent Dollé (CIHEAM-IAMM).

    The views expressed in this report are the sole responsibility of the authors, and do not reflect those of the European Commission, the Brussels workshop participants or institutions they belong to.

    Country-specific case studies for Egypt, Morocco and Tunisia on the one hand, and Turkey on the other hand, are published in two separate JRC reports, i.e. Ben Abdallah, El Mekki and Siam (2013) and Cakmak and Dudu (2013) respectively.

    The project benefited from support granted by the Enlargement and Integration Action of the Joint Research Centre, and the European Union's Seventh Framework programme FP7/2007-2011 under Grant Agreement 290693 FOODSECURE-Exploring the Future of Global Food and Nutrition Security.

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    Table of Contents

    Acknowledgments ......................................................................................................................................... 2 Table of Contents ........................................................................................................................................... 3 Acronyms .......................................................................................................................................................... 4 Figures and Tables ......................................................................................................................................... 5 1 Introduction .............................................................................................................................................. 6 2 General equilibrium modelling strategy ........................................................................................ 7 3 Baseline and scenarios .......................................................................................................................... 9

    3.1 Trade liberalisation scenario .................................................................................................... 9 3.2 Domestic Consumer Protection scenario ........................................................................... 12 3.3 Investment and Productivity Growth scenario ................................................................ 14 3.4 Food waste scenario ................................................................................................................... 14

    4 Results of MAGNET simulation ........................................................................................................ 15

    4.1 Results of trade liberalisation scenario .............................................................................. 15 4.2 Results of domestic consumer protection scenario ....................................................... 22 4.3 Results of investment and productivity growth scenario ........................................... 27 4.4 Results of reducing food waste scenario ............................................................................ 32

    5 Summary and concluding remarks for MAGNET simulations ............................................. 35 References ...................................................................................................................................................... 39 Appendix ......................................................................................................................................................... 41

    A1. Brief description of the GTAP model ................................................................................... 41 A2. Main features of the MAGNET model................................................................................... 42 A3. Shocks applied in the Food Waste scenario ...................................................................... 46 A4. Business as Usual scenario ...................................................................................................... 47

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    Acronyms

    BaU Business-as-Usual scenario (baseline) CET Constant elasticity of transformation CGE Computable general equilibrium model DCFTAs Deep and comprehensive free trade agreements DCP Domestic Consumer Protection EC European Commission EFTA European Free Trade Area EU European Union EU27 27 Member States of the European Union EV equivalent variation EUR Euro FDI Foreign direct investment FW Food waste GTAP Global Trade Analysis Project GDP Gross domestic product IPG Investment and Productivity Growth MAGNET Modular Applied General Equilibrium Tool MED countries Mediterranean countries MENA Middle East and North Africa NAF countries Egypt (egy), Morocco (mor) and Tunisia (tun) NTMs Non-tariff measures pp percentage points SAM Social accounting matrix SPS Sanitary and phytosanitary TBT Technical barriers to trade TFP Total factor productivity TL Trade liberalisation TEMT countries Egypt (egy), Morocco (mor) and Tunisia (tun) and Turkey (tur) TRQs Tariff rate quotas ROW Rest of the World UNCTAD United Nations Conference on Trade and Development USD US dollar ROW Rest of the World

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    Figures and Tables

    Figure 1 Trade liberalisation impacts on imports, 2020 .......................................................... 16

    Figure 2 Trade liberalisation impacts on agri-food imports by source, 2020 .................. 17

    Figure 3 Trade liberalisation impacts on food security indicators, 2020 .......................... 19

    Figure 4 Trade liberalisation impacts on import tariff revenues, 2020 ............................. 20

    Figure 5 Trade liberalisation impacts on employment and real wages, 2020 ................. 21

    Figure 6 DCP scenario impacts on wheat production, 2020 ................................................... 23

    Figure 7 DCP scenario impacts on production in NAF countries, 2020 ............................. 23

    Figure 8 DCP scenario impacts on the labour market, 2020 ................................................... 24

    Figure 9 DCP scenario impacts on food security indicators, 2020 ..............................

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