Regional integration in the MENA region: Deepening the Greater Arab Free Trade Area through trade facilitation

This chapter assesses the trade facilitation performance of the countries of the Middle East and North Africa (MENA) region and determines the welfare and sectoral effects of trade facilitation improvements within the context of regional trade integration. It shows that introducing a trade facilitation provision in the Greater Arab Free Trade Area (GAFTA) will lead to a significant welfare increase for all MENA sub-regions compared with a scenario of further trade liberalization without trade facilitation. Trade facilitation in the GAFTA would enhance export competitiveness and lead to a significant increase in overall and intra-trade export value for all countries, but particularly for the Mashreq and Maghreb countries. In the analysis, all sub-regions witnessed an export boost in agro-food product exports, particularly those products in which the Mashreq and Maghreb countries have a comparative advantage. The welfare-enhancing results of this analysis indicate that the MENA region has a high stake in implementing the WTO Agreement on Trade Facilitation (TFA), and should begin with areas that contribute the most to trade cost reduction, such as automation and streamlining of trade procedures.