Abstract
This paper assesses the economic implications of the termination of the preferential agreement for exporting Egyptian natural gas to Israel in 2012. Abolishing the preferential treatment is simulated with the GTAP model and an updated GTAP database that reflects the actual natural gas production, trade shares, and cost structures in both countries. Results reveal that Egypt witnesses welfare gains, should the preferential treatment be abolished, while its overall production of gas decreases and the supply of gas to the domestic market increases.
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