IMPERFECT COMPETITION IN THE CONTEXT OF AGM

1
IMPERFECT COMPETITION IN THE CONTEXT OF AGM

• WHY IMPERFECT COMPETITION?
• REALISTIC ASSUMPTION FOR MANUFACTURING SERVICES
  SECTORS
• GAINS FROM ECONOMIES SCALE (Harry Cox, 1986)

2
IMPERFECT COMPETITION IN GTAP

• FRANÇOIS J. (1998, TECHNICAL PAPER 14)
• ELBEHRI AZIZ THOMAS HERTELA Comparative
  Analysis of the EU-Morocco FTA vs. Multilateral
  Liberalization 2006.

3
ELBEHRI AZIZ THOMAS HERTEL(2006)

• RELATIVELY EASY TO INCLUDE IC IN RELEVANT
  EQUATIONS OF GTAP MODEL
• DIFFICULT INTENSIVE IN DATA AND CALIBRATION
• Cournot model by Herfindhal index
• Cost Disadvantage Ratio (CDR) by gross
  plant-level sales

4
ELBEHRI AZIZ THOMAS HERTEL(2006). MAIN
CONCLUSIONS FINDINGS

• FTA
• Deteriorating tot
• Reduction of qo per firm in ind with high scale
  economies
• Trade diversion
• Increase unemployment of labour even with
  transfer from EU

• MTA
• Lesser tot
• Positive scale effect in the qo
• Trade creation
• Decrease unemployment of labour even without
  transfer from EU

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PRESENTATIONS

• TRADE DIVERSION
• TOT
• PRODUCTIVITY
• TRANSFERS

6
TRADE DIVERSION AND TRADE CREATION DIVERSION IN
THE CONTEXT OF AGM

• IMPERFECT COMPETITION

TEAM 1 WOJTEK J.L.H
7
TRADE DIVERSION

• DEFINITION grossly, TD can be defined as the
  displacement of more competitive imports from ROW
  in favour of partner countries.
• DIFFERENT MEASURES compatibility index (Grav.
  Models) welfare analyses (AGE)---gtAlloca. Effi.

8
DESIGN OF OUR EXPERIMENT

• TWO MAIN SIMULATIONS FTA MTA
• SAME CLOSURE
• SYMMETRICAL SHOCKS
• FTA100 REDUCTION IN TARIFF FROM MOROCCO TO EU
• MTA 100 REDUCTION IN TARIFF BETWEEN MOROCCO
  ALL OTHER REGIONS
• NON AGRICULTURAL NON FOOD COMMODITIES

9
welfare contribution of Imports

• FTA 442

FTAw2 652
442-652 -210
10
MTAX Welfare Contribution
11
Mvt Decomposion

• Equation MKTPRICES (-21)
• pms(i,r,s) tm(i,s) tms(i,r,s)
  pcif(i,r,s)
• Equation DPRICEIMP (-18)
• pim(i,s) sum(k,REG, MSHRS(i,k,s)
  pms(i,k,s)-ams(i,k,s))
• Equation IMPORTDEMAND
• qxs(i,r,s) -ams(i,r,s) qim(i,s) - ESUBM(i)
  pms(i,r,s) - ams(i,r,s) - pim(i,s)
• Equation CONT_EV_qimisr
• CNTqimisr(i,s,r) MTAX(i,s,r)0.01EVSCALFACT(r)
  qxs(i,s,r) - pop(r)

R031 TempCoeff 1 qxs 109.87 2
e1_ams 0 3 e1_qim -50.01 4 e1_ESUBM -26.89
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Differences mvh
FTAw2 pms 1 MOR -10.19 2 EU -21.20 3 ROW -10.62
FTA pms 1 MOR -12.19 2 EU -16.20 3 ROW -0.72
pim -18.6
pim -19.2
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Conclusions