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INTRODUCTION 5


Second, we use household survey data and computable general equilibrium (CGE) models to simulate the effects of trade liberalization on the poor in four of them: Egypt, Morocco, Syria, and Tunisia. Although we do not claim that these countries are representative of the region, we hope that the study con- tributes further to the empirical evidence on the distributional effects of agri- cultural trade liberalization in a region that has received limited attention.


Organization of the Report


Chapter 2 of the report provides a regional overview on agriculture, trade, and poverty in the non-oil-exporting MENA countries. MENA is an economi- cally diverse region that comprises 21 countries. The region’s economic development over the past 25 years has been influenced by both the price of oil and the dominance of the role of the state in economic policies and structures (World Bank 2009). The MENA region has experienced slow eco- nomic growth in recent years, leading to various social problems, including high levels of unemployment. The growth of per capita GDP in the region has generally lagged behind the average of developing countries (World Bank 2008b). Agriculture contributes modestly to GDP but employs a sizable share of the labor force.


This chapter also explores the global and regional trade environment by analyzing the structure of protection that the countries in the region apply and face and examines the trade integration options in the region. These countries share levels of trade protection that are higher than the levels in many other regions of the world, especially in agriculture. But the countries enjoy good market access to developed economies due to the multiple trade preferences granted by their two main trading partners, the E.U. and the United States. In spite of high applied tariffs, nontariff barriers constitute even a higher trade impediment in the region. For these countries, comple- mentary policies aimed at reducing the transport costs and improving the quality standards of traded goods must accompany a more outward-oriented trade policy in order to stimulate more rapid growth in the region and con- tribute positively to reducing poverty.


Chapter 3 reviews the evidence on the impact of trade liberalization in the selected MENA countries, with emphasis on studies that examine its impact on poor households. The relationship between trade liberalization and poverty alleviation is a complex one because although the relationship can be positive, it must take into account several key factors in addition to prices (Winters, McCulloch, and McKay 2004). The traditional argument focuses on prices of goods and factors. Given that the majority of poor people live in rural areas and work in the agricultural sector, where trade distortion is usu- ally higher, global trade liberalization could imply higher world agricultural


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