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Abstract
The complexity derived from the bilateral trade liberalisation process in the
Mediterranean region is difficult to represent in a trade model, not only because of the
range of instruments still constraining trade but also because of the special nature of the
most important traded goods (product differentiation and seasonality).
Tariff-rate quotas (TRQ's) and the entry price system are clearly defined on a monthly
basis for the fruits and vegetables trade flows towards the European Union (EU). This
point makes efforts to model such a trade in yearly basis not representative of reality.
We propose a static partial equilibrium model tailored to model trade impacts of
specific policy instruments which considers imports from different sources as imperfect
substitutes, following the non-linear Armington type model.
Different policy scenarios have been run using the model, considering changes in
TRQ's and Entry Price regimes, its tariffication and preference erosion.
The results of model runs show that, as regards to EU producers, bilateral trade
liberalisation with extension of TRQs would be the least dramatic scenario. By contrast,
the phasing out of the entry price system would have serious consequences on EU
producers. The model has also given detailed information on Morocco's interests in the
negotiation, although it could easily include a larger number of suppliers. Morocco
appears to be interested in multilateral liberalisation as well as in bilateral liberalisation.
In fact, multilateral liberalisation will not cause a great deal of preference erosion
against Moroccan exporters, unless tariff reductions only affect MFN suppliers.