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Economics Research International
Volume 2012 (2012), Article ID 616793, 15 pages
http://dx.doi.org/10.1155/2012/616793
Research Article

Some New Insights into Trade Potential between the EU and Its Mediterranean Partners

UFR Sciences Économiques et de Gestion, Université du Sud Toulon-Var (LEAD), Avenue de l'Université, BP 20934, 83957 La Garde Cedex, France

Received 22 March 2012; Accepted 3 May 2012

Academic Editor: Almas Heshmati

Copyright © 2012 Nicolas Péridy. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

This paper provides new insights into the calculation of trade potential between the EU and its Southern and Eastern Mediterranean partners (MPs). It is based on an econometric specification which takes into account some new explanatory variables which are not included simultaneously in the previous studies. These include trade costs (tariffs, NTBs, and logistics costs), factor movement (migration and FDI), as well as governance. In addition, specific estimators are implemented in order to account for zero trade flows, endogeneity and dynamics. The main conclusion of this study is that contrary to some results found in previous studies, MPs have reached their export potential with the EU. It is also shown that there is no specificity of the MP-EU trade potential in comparison with the other main PTAs (NAFTA, MERCOSUR, and ASEAN) which have also reached their trade potential. These results have strong policy implications.