CHAPTER 11
Economic Gains of Regional Agreements in the Maghreb: Deeper versus Wider Integration Paloma Anos Casero and Ganesh Kumar Seshan
Studies have shown that regional integration in the Maghreb (Algeria, Morocco, and Tunisia) is low (World Bank 2006) and the potential for integration of product markets is limited, given a variety of economic disincentives relating to the structure of production, endowments, and size of the Maghreb economies. A regional strategy based on market integration of merchandise products is thus unlikely to generate a substantial increase in growth. At the same time, policy barriers constrain the opportunities for enhanced trade and investment in the Maghreb. These countries systematically underperform, particularly in the area of policy reforms of services, the countries of Central and Eastern Europe. This chapter argues that deeper economic integration (focused on service liberalization and investment climate reforms) and wider integration (with the European Union) have the potential to generate more substantial economic gains than would be obtained from regional integration of goods markets.1
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