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 HERTEL:“A 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

5. PRESENTATIONS TRADE DIVERSION TOT PRODUCTIVITY TRANSFERS

6. TRADE DIVERSION AND TRADE CREATION & DIVERSION IN THE CONTEXT OF AGM TEAM 1: WOJTEK & J.L.H IMPERFECT COMPETITION

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)--->Alloca. Effi.

8. DESIGN OF OUR EXPERIMENT TWO MAIN SIMULATIONS: FTA & MTA SAME CLOSURE SYMMETRICAL SHOCKS: –FTA:100% 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 = 442FTAw2 = 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)*[0.01*EVSCALFACT(r)]*[qxs(i,s,r) - pop(r)]; R031TempCoeff 1 qxs 109.87 2 e1_ams0 3 e1_qim-50.01 4 e1_ESUBM-26.89

12. 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= -18.6pim= -19.2

13. Conclusions