This page contains a Flash digital edition of a book.
124 CHAPTER 5


tural commodity prices rise proportionately, Tunisia will face declining terms of trade because it is a net agricultural importer. On the other hand, it would benefit from domestic liberalization due to efficiency gains. The combined effect is likely to be positive for Tunisia as a whole because most estimates show that efficiency gains would be larger than terms-of-trade effects. However, the combination of global and domestic liberalization would probably reduce agricultural prices because the effect of the loss of high lev- els of protection (89 percent on average) would be greater than the modest increase in world prices (5–20 percent) due to global liberalization. Simulations using a CGE model linked to household survey data suggest that the removal of industrial tariffs on imports from the E.U. (which approximates Tunisian import liberalization under the EMP agreement) would cause both imports and exports to expand significantly, although almost all the change would be in nonagricultural trade. Real GDP would increase slightly (0.2 per- cent) because of the efficiency gains associated with the removal of distortions. Poverty would decline from 8.1 to 7.7 percent. Significant gains in rural poverty reduction would more than offset the small increase in urban poverty. The removal of all tariffs on imports from the E.U. (approximating the Tunisian side of an extended EMP agreement) would cause large increases in imports of meat, beverages and tobacco, fruit, dairy products, and vegetable oil as import barriers on these goods were lifted. The effect on GDP and pov- erty would be similar to that in the first simulation. The elimination of tariffs on imports from all countries would increase the imports of almost all agricultural commodities, as well as stimulate agricul- tural exports to maintain the trade balance. The reduction in poverty would be slightly greater in this case than in the case of the first two simulations: poverty would decline from 8.1 percent in the base scenario to 7.6 percent. The rural poor would again be the main beneficiaries of these changes in trade policy.


Finally, the elimination of all Tunisian tariffs plus global trade liberal- ization (represented by a 15 percent increase in world agricultural prices) would not do much for the overall economy. This is partly because, as a net agricultural importer, Tunisia would lose out due to higher world agricul- tural prices. Nonetheless, the agricultural sector would gain from the higher prices. Exports of fruit (mainly olives) would expand significantly, as would exports of a number of other agricultural commodities. As a result, poverty would decline to the lowest level among the four scenarios. Compared to the base scenario, rural poverty would be cut in half (from 15.8 to 7.9 percent) according to this simulation. Overall, it appears that trade liberalization would have only modest effects on the level of GDP, but it would have a significant effect in reducing pov-


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64  |  Page 65  |  Page 66  |  Page 67  |  Page 68  |  Page 69  |  Page 70  |  Page 71  |  Page 72  |  Page 73  |  Page 74  |  Page 75  |  Page 76  |  Page 77  |  Page 78  |  Page 79  |  Page 80  |  Page 81  |  Page 82  |  Page 83  |  Page 84  |  Page 85  |  Page 86  |  Page 87  |  Page 88  |  Page 89  |  Page 90  |  Page 91  |  Page 92  |  Page 93  |  Page 94  |  Page 95  |  Page 96  |  Page 97  |  Page 98  |  Page 99  |  Page 100  |  Page 101  |  Page 102  |  Page 103  |  Page 104  |  Page 105  |  Page 106  |  Page 107  |  Page 108  |  Page 109  |  Page 110  |  Page 111  |  Page 112  |  Page 113  |  Page 114  |  Page 115  |  Page 116  |  Page 117  |  Page 118  |  Page 119  |  Page 120  |  Page 121  |  Page 122  |  Page 123  |  Page 124  |  Page 125  |  Page 126  |  Page 127  |  Page 128  |  Page 129  |  Page 130  |  Page 131  |  Page 132  |  Page 133  |  Page 134  |  Page 135  |  Page 136  |  Page 137  |  Page 138  |  Page 139  |  Page 140  |  Page 141  |  Page 142  |  Page 143  |  Page 144  |  Page 145  |  Page 146  |  Page 147  |  Page 148  |  Page 149  |  Page 150  |  Page 151  |  Page 152  |  Page 153  |  Page 154  |  Page 155  |  Page 156  |  Page 157  |  Page 158  |  Page 159  |  Page 160  |  Page 161  |  Page 162  |  Page 163  |  Page 164  |  Page 165  |  Page 166  |  Page 167  |  Page 168  |  Page 169  |  Page 170  |  Page 171  |  Page 172  |  Page 173  |  Page 174  |  Page 175  |  Page 176  |  Page 177  |  Page 178  |  Page 179  |  Page 180  |  Page 181  |  Page 182  |  Page 183  |  Page 184  |  Page 185  |  Page 186  |  Page 187  |  Page 188  |  Page 189  |  Page 190  |  Page 191  |  Page 192  |  Page 193  |  Page 194  |  Page 195  |  Page 196  |  Page 197  |  Page 198  |  Page 199  |  Page 200  |  Page 201  |  Page 202  |  Page 203  |  Page 204  |  Page 205  |  Page 206  |  Page 207  |  Page 208  |  Page 209  |  Page 210  |  Page 211  |  Page 212  |  Page 213  |  Page 214  |  Page 215  |  Page 216  |  Page 217  |  Page 218  |  Page 219  |  Page 220  |  Page 221  |  Page 222  |  Page 223  |  Page 224  |  Page 225  |  Page 226  |  Page 227  |  Page 228  |  Page 229  |  Page 230  |  Page 231  |  Page 232  |  Page 233  |  Page 234  |  Page 235  |  Page 236  |  Page 237  |  Page 238  |  Page 239  |  Page 240  |  Page 241  |  Page 242  |  Page 243  |  Page 244  |  Page 245  |  Page 246  |  Page 247  |  Page 248  |  Page 249  |  Page 250  |  Page 251  |  Page 252