Conference Paper
The Past and the Future Trade Patterns of the MENA Region: The Pursuit of Growth
No.
ERF29AC_88
Publisher
ERF
Date
May, 2023
This study investigates the past trade patterns of the MENA region and analyzes the sectoral growth impacts of them. In light of the results of econometric analysis, the study further predicts the growth impact of any future trade agreements supporting a prominent specific trade pattern in the framework of input-output modeling. We employ a sample of two agriculture, one mining, ten manufacturing, and twelve service sectors of 19 MENA countries and 186 trading partners from 1990 to 2015. Our graphical illustration indicates that while the shares of the EU (the major trading partner with a share higher than 30%) and other developed countries in all types of trade decrease, the share of the other developing countries in all kinds of trade and the share of China in intermediate trade increase. Our growth results suggest that while expanding forward global value chain participation with all groups or countries promotes the manufacturing sector, expanding forward global value chain participation with China and other developing countries enhances the service sector. All industries gain from an increase in the backward global value chain participation with the EU and the US. Our simulation findings also propose that the growth of the MENA region is highly dependent on trade with the rest of the world, it is important to notice that the growth of both manufacturing and non-manufacturing sectors of other Middle East is enhanced at most with higher imported intermediates from the GCC. Given these results and depending on the input-output modeling, we argue that global value chain participation of the MENA region promotes the growth of all sectors depending on the types of flows and trading partners. These results reveal the importance of systematic and dynamic trade policies to effectively integrate the MENA region into both regional and global value chains and to reap the benefits of them.
Research Associates
Pinar Tat
Assistant Professor, Department of Economics, Gebze Technical...
Authors
Abdullah Altun
Assistant Professor, Department of Economics, Gebze Technical...
Authors
Halit Yanikkaya
Professor, Department of Economics, Gebze Technical University,...