TY - JOUR
T1 - Deeper Integration or Open Regionalism in the Indian Ocean Rim Association (IORA)
T2 - A CGE Approach
AU - Akintola, Abdallah
AU - Boughanmi, Houcine
AU - Antimiani, Alessandro
AU - Zaibet, Lokman
AU - Kotagama, Hemesiri
N1 - Publisher Copyright:
© 2022, Center for Economic Integration. All rights reserved.
PY - 2022/12
Y1 - 2022/12
N2 - The Indian Ocean Rim Association (IORA) is a regional association based on the principle of open regionalism to promote liberalization through trade and investment facilitation. This study compares two main scenarios with the ingredients of a deeper regional integration compared to the IORA's present open regionalism status. Scenario I evaluates the effects of gradual tariff cuts on IORA, while Scenario II combines the impact of tariff cuts, non-tariff measures (NTM) reduction, and trade facilitation. A recent recursive dynamic model, called Global Trade Analysis Project recursive dynamic model (GTAP-RD), was used to understand the adjustment path. The result shows welfare gain for all I ORA countries when a trade liberalization involving tariff cuts is complemented with NTM reduction and trade facilitation. In addition, the "NTM spillover" effect on some non-IORA members (the rest of Gulf Cooperation Council, the rest of Greater Arab Free Trade Agreement, and the United Kingdom) was observed. The results suggest that IORA has more to gain if it involves a deeper regional integration than the present form of open regionalism.
AB - The Indian Ocean Rim Association (IORA) is a regional association based on the principle of open regionalism to promote liberalization through trade and investment facilitation. This study compares two main scenarios with the ingredients of a deeper regional integration compared to the IORA's present open regionalism status. Scenario I evaluates the effects of gradual tariff cuts on IORA, while Scenario II combines the impact of tariff cuts, non-tariff measures (NTM) reduction, and trade facilitation. A recent recursive dynamic model, called Global Trade Analysis Project recursive dynamic model (GTAP-RD), was used to understand the adjustment path. The result shows welfare gain for all I ORA countries when a trade liberalization involving tariff cuts is complemented with NTM reduction and trade facilitation. In addition, the "NTM spillover" effect on some non-IORA members (the rest of Gulf Cooperation Council, the rest of Greater Arab Free Trade Agreement, and the United Kingdom) was observed. The results suggest that IORA has more to gain if it involves a deeper regional integration than the present form of open regionalism.
KW - dynamic model
KW - Indian Ocean Rim Association
KW - integration
KW - non-tariff measures
KW - trade facilitation
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U2 - 10.11130/jei.2022.37.4.705
DO - 10.11130/jei.2022.37.4.705
M3 - Article
AN - SCOPUS:85143517727
SN - 1225-651X
VL - 37
SP - 705
EP - 733
JO - Journal of Economic Integration
JF - Journal of Economic Integration
IS - 4
ER -