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GTAP Resource #2635

"Economic and Social Impacts of the Prospective EU-ECOWAS Economic Partnership Agreement (EPA): The Evidence for Cote d'Ivoire"
by Kone, Youssouf

The Economic Community of West African states (ECOWAS) is currently engaged in negotiations with the European Union over the successor agreement to the Lome IV Convention which grants non-reciprocal preferential access to the European market for exports of African Caribbean and Pacific countries. The main objective of the new Economic partnership agreement (EPA) is the ‘‘eradication of poverty in a consistent manner with the objectives of sustainable development and the gradual integration of the ACP countries in the world economy’’. Preliminary discussions have suggested the establishment of a Free Trade Area (FTA) between ECOWAS and European Union in accordance with the relevant WTO rules, eliminating tariff and non-tariff barriers progressively and help further integration among West African countries. The new regime adopted under the Cotonou Agreement also addresses the issue of trade related aid in particular to compensate fiscal revenue loss and address supply-side constraints.
In this paper, we use the standard Global Trade Analysis Project (GTAP) model to assess the prospective economic and social effects of the proposed EU-ECOWAS EPAs in Cote d’Ivoire. These impacts along with proposed average tariff reductions are utilized to forecast the potential revenue gain or loss resulting from the establishment of an EPA.

The preliminary simulation results show that full reciprocity will be costly for Cote d’Ivoire in terms of revenue losses, adjustments costs associated with de-industrialisation. However, unrestricted market access for Cote d’Ivoire into the EU-25, taking into account the issue of sensitive products and fiscal compensations promise positive gains. In addition it will result in welfare gains.

Key Words: EPAs, Free Trade Area, ECOWAS, Cote d’Ivoire, GTAP, CGE Modelling, Fiscal impact, Welfare.

Resource Details (Export Citation) GTAP Keywords
Category: 2008 Conference Paper
Status: Published
By/In: Presented at the 11th Annual Conference on Global Economic Analysis, Helsinki, Finland
Date: 2008
Created: Kone, Y. (4/10/2008)
Updated: Batta, G. (4/16/2008)
Visits: 4,716
No keywords have been specified.

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