Abstract
This paper adresses the issue of trade liberalization, as an alternative to international migration, between Morocco and Europe. A dynamic computable general equilibrium model of the Moroccan economy is used to study the likely consequences of free trade upon incomes and employment, as well as their distribution among sectors and social categories. It is found that the budgetary (increase in indirect taxes) and monetary (devaluation) measures that accompany the lowering of import duties somewhat lessen the positive effects of a better factor allocation, and that in the long run free trade would only have a limited impact on national income, total employment and poverty. The hypotheses concerning the responses of exports and foreign investment are crucial for this kind of assessment, as well as the type of cge model used.
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