Deeper Integration or Open Regionalism in the Indian Ocean Rim Association (IORA): A CGE Approach

Abdallah Akintola*, Houcine Boughanmi, Alessandro Antimiani, Lokman Zaibet, Hemesiri Kotagama

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

Abstract

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.

Original languageEnglish
Pages (from-to)705-733
Number of pages29
JournalJournal of Economic Integration
Volume37
Issue number4
DOIs
Publication statusPublished - Dec 2022

Keywords

  • dynamic model
  • Indian Ocean Rim Association
  • integration
  • non-tariff measures
  • trade facilitation

ASJC Scopus subject areas

  • Economics, Econometrics and Finance(all)

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