Sector equilibrium, general equilibrium: modelling of the impact of liberalisation on Tunisian agriculture and economy | Equilibre sectoriel, equilibre general: Modelisation de l'impact de la liberalisation sur l'agriculture et l'economie tunisiennes

The 1976 cooperation agreements between Tunisia and the European Union, its main trade partner, were terminated by the GATT agreements. In order to continue to benefit from community preferences, Tunisia has signed a partnership agreement with the European Un-ion in 1995 with regard to establish a free trade area (FTA). This agreement which is actually limited to industrial products is part of a larger project that aims at a European-Mediterranean FTA in 2010. The negotiations about the inclusion of agricultural products trade in this project are still in progress. The object of this study is to analyse the impact of the FTA on Tunisian economy. This ques-tion is very complicated because the effects are both direct and indirect, both short-term and long-term and both economic and social at the same time. In our investigation the impact of removing all Tunisian tariffs on imports is evaluated by fo-cusing on three main issues: The first issue is to analyse the principal measures taken at national level and to explain the framework of future trade. The second issue is to investigate the potential effects of liberalisation on trade structure and industrial specialization in Tunisia. To this end, a static applied general equilibrium model is used to simulate macroeconomic and sectoral effects of the implementation of the FTA on industrial sector. Both competitive and Cournot oligopolistic commodities market structures are considered. Finally, the question of the future agricultural trade liberalisation is examined with the aid of a static multi-region sector model. This model has a detailed treatment of the agricultural and rural economy in Tunisia (based on data of 201 representative farms in 21 regions all over the country). Our results suggest that the traditionally export-oriented sectors will cope with the liberalisa-tion without any problems. In opposition to that the sectors that are usually more protected against foreign competition like the agricultural sector will suffer. The most unfortunate ef-fects refer to public budget equilibrium. It is shown that the complementary policy is indis-pensable not only to attenuate the shock of liberalisation but also in terms of competition and economic growth. The fiscal reform proves to be an important element of every complemen-tary domestic policy of the commercial liberalisation. It is found that the FTA improves global welfare in our scenarios and that these gains are most significant with oligopoly. As for sectoral level on the other hand, our results suggest that under current conditions agricultural liberalisation is likely to benefit only those producers already taking advantage of technological packages and to by pass small farmers and pe-sants.