Implications of the Free Trade Agreements between the EU and the Maghrib Economies for Employment in the Latter: Cline's Fallacy of Composition Revisited

Hunt, Diana (2005) Implications of the Free Trade Agreements between the EU and the Maghrib Economies for Employment in the Latter: Cline's Fallacy of Composition Revisited. Journal of North African Studies, 10 (2). pp. 201-221. ISSN 13629387

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Abstract

The justification offered in the 1990s by the European Commission for establishing free trade agreements (FTAs) between the EU and the economies of the eastern and southern Mediterranean seaboard (SEM) was in line with standard justifications offered for implementation of stabilisation and structural adjustment programmes: the FTAs and associated domestic policy reforms would stimulate increased allocative efficiency in the SEM economies, thereby enhancing consumer welfare, promoting exports and encouraging foreign direct investment. Employment impacts received relatively little attention beyond some provision for retraining, on the assumption that, following reduction of impediments to a free labour market, displaced labour would be reallocated to alternative activities, chiefly within the export sector. This paper considers the significance of two constraints on the ability of the North African economies to reabsorb the labour that will be displaced following implementation of unilateral import liberalisation: increased - and increasing - competition in their main manufactured export market and domestic demand limitations on the ability of small and micro enterprises to absorb labour at currently prevailing returns.

Item Type: Article
Schools and Departments: School of Business, Management and Economics > Economics
Depositing User: Diana Margaret Hunt
Date Deposited: 06 Feb 2012 20:18
Last Modified: 09 Jul 2012 10:58
URI: http://sro.sussex.ac.uk/id/eprint/25298
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