Title: Effects of openness in services sectors on Tunisian economy under the DCFTA with the EU: border liberalisation and investment liberalisation

Authors: Wissem Belhadj; Mohamed Adel Dhif; Abdessalem Abbassi

Addresses: Economics and Industrial Management Laboratory (LEGI), Economics Department, Tunisia Polytechnic School, University of Carthage, Tunis, 1054, Tunisia ' Economics and Industrial Management Laboratory (LEGI), Economics Department, Tunisia Polytechnic School, University of Carthage, Tunis, 1054, Tunisia ' Laboratory of Economic and Institutional Environment of the Firm (ENVIE), Economics Department, Faculty of Economics and Management of Nabeul, University of Carthage, Nabeul, 8000, Tunisia

Abstract: The objective of this paper is to assess the impact of services liberalisation on the Tunisian economy in the context of a Deep and Comprehensive Free Trade Agreement with the European Union. An intertemporal dynamic CGE model with perfect foresight is developed to compare some alternative trade policy simulations. The main findings of this study are that freeing up service sectors induces small welfare gains and entails a significant decrease in the unemployment rate; whereas, the effect on the labour demand is fairly small. Moreover, lowering NTMs in services has a positive impact on the level of imports from the European Union countries. The growth of imported services is less important when assuming further liberalisation of investment. The simulations results reveal also that the impact of services liberalisation on production and exports depends essentially on the initial level of NTMs for these services.

Keywords: openness in services sectors; border liberalisation; investment liberalisation; Tunisia; DCFTA; deep and comprehensive free trade agreement; intertemporal dynamic CGE model.

DOI: 10.1504/IJTGM.2021.118905

International Journal of Trade and Global Markets, 2021 Vol.14 No.6, pp.525 - 547

Received: 10 Jun 2019
Accepted: 25 Mar 2020

Published online: 28 Oct 2021 *

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