The impact of the Trade Facilitation Agreement (TFA) on the Arab Maghreb Union's regional integration.

Abstract

This article presents an assessment of the implementation of the Trade Facilitation Agreement (TFA) in the context of the Arab Maghreb Union’s ongoing regional integration efforts and its main contributions. It indicates that trade-related costs hamper not only Africa’s integration with the rest of the world but, more specifically, its regional integration. The article analyzes some relevant indicators from the World Bank Doing Business database. Given the asymmetric magnitude of transaction costs by international standards, the analysis affirms how critical trade facilitation is for the UMA’s growth. Moreover, in order to estimate the UMA’s trade potential, the article uses a gravity model applied to panel data over a period of 10 years for 16 countries. It results that in North Africa, trade potential is far from being attained and the flows studied here represent only 46% of the estimations. Within this set, the UMA is at 56% of the estimated level. To conclude, regardless of the significant economic progress registered in the last ten years, the Maghreb is still impaired from a lack of solidity and involvement in its trade relations. Hence, the analysis of this potential shows the relative presence of potential according to each country, and in this way, calls to mind the need for policies that aim to build true integration in the Maghreb.